SKS Technologies Group's significant insider ownership suggests inherent interests in company's expansion
A total of 10 investors have a majority stake in the company with 52% ownership
Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
Every investor in SKS Technologies Group Limited (ASX:SKS) should be aware of the most powerful shareholder groups. With 37% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
As a result, insiders scored the highest last week as the company hit AU$151m market cap following a 35% gain in the stock.
In the chart below, we zoom in on the different ownership groups of SKS Technologies Group.
What Does The Lack Of Institutional Ownership Tell Us About SKS Technologies Group?
Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.
There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. SKS Technologies Group might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.
ASX:SKS Earnings and Revenue Growth July 12th 2024
Hedge funds don't have many shares in SKS Technologies Group. Our data suggests that Peter Jinks, who is also the company's Top Key Executive, holds the most number of shares at 14%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. Gregory Jinks is the second largest shareholder owning 12% of common stock, and Ian Alexander holds about 3.9% of the company stock. Interestingly, the second-largest shareholder, Gregory Jinks is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.
We did some more digging and found that 10 of the top shareholders account for roughly 52% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of SKS Technologies Group
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our information suggests that insiders maintain a significant holding in SKS Technologies Group Limited. It has a market capitalization of just AU$151m, and insiders have AU$56m 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 34% 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.
Private Company Ownership
Our data indicates that Private Companies hold 29%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
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 1 warning sign for SKS Technologies Group 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.
