Public companies are Mermaid Maritime Public Company Limited's (SGX:DU4) biggest owners and were rewarded after market cap rose by S$28m last week

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editorial-team@simplywallst.com (Simply Wall St)

Tue, Sep 17, 2024, 11:47 PM 4 min read

To get a sense of who is truly in control of Mermaid Maritime Public Company Limited (SGX:DU4), it is important to understand the ownership structure of the business. With 58% stake, public companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, public companies benefitted the most after the company's market cap rose by S$28m last week.

In the chart below, we zoom in on the different ownership groups of Mermaid Maritime.

View our latest analysis for Mermaid Maritime

ownership-breakdown — SGX:DU4 Ownership Breakdown September 18th 2024

What Does The Lack Of Institutional Ownership Tell Us About Mermaid Maritime?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. Mermaid Maritime might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

earnings-and-revenue-growth — SGX:DU4 Earnings and Revenue Growth September 18th 2024

Mermaid Maritime is not owned by hedge funds. Thoresen Thai Agencies Public Company Limited is currently the company's largest shareholder with 58% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Meanwhile, the second and third largest shareholders, hold 15% and 3.9%, of the shares outstanding, respectively. Chalermchai Mahagitsiri, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Mermaid Maritime

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems insiders own a significant proportion of Mermaid Maritime Public Company Limited. It has a market capitalization of just S$195m, and insiders have S$38m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 21% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Public Company Ownership

We can see that public companies hold 58% of the Mermaid Maritime shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Mermaid Maritime (at least 1 which is a bit unpleasant) , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.