Significant control over Scott Technology by public companies implies that the general public has more power to influence management and governance-related decisions
54% of the company is held by a single shareholder (JBS S.A.)
A look at the shareholders of Scott Technology Limited (NZSE:SCT) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are public companies with 52% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Clearly, public companies benefitted the most after the company's market cap rose by NZ$28m last week.
Let's take a closer look to see what the different types of shareholders can tell us about Scott Technology.
What Does The Institutional Ownership Tell Us About Scott Technology?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
As you can see, institutional investors have a fair amount of stake in Scott Technology. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Scott Technology, (below). Of course, keep in mind that there are other factors to consider, too.
NZSE:SCT Earnings and Revenue Growth November 22nd 2024
We note that hedge funds don't have a meaningful investment in Scott Technology. JBS S.A. is currently the largest shareholder, with 54% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 6.9% and 4.1% of the shares outstanding respectively, Oakwood Securities Limited., Asset Management Arm and Accident Compensation Corporation, Asset Management Arm are the second and third largest shareholders.
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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
Insider Ownership Of Scott Technology
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
We can see that insiders own shares in Scott Technology Limited. In their own names, insiders own NZ$2.6m worth of stock in the NZ$181m company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 28% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Public Company Ownership
We can see that public companies hold 52% of the Scott Technology shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.
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 risks, for instance. Every company has them, and we've spotted 3 warning signs for Scott Technology you should know about.
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.
