Michael Hill International Limited's (ASX:MHJ) top owners are private companies with 40% stake, while 38% is held by individual investors
Key Insights
Michael Hill International's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
The top 2 shareholders own 51% of the company
Institutional ownership in Michael Hill International is 13%
To get a sense of who is truly in control of Michael Hill International Limited (ASX:MHJ), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are private companies with 40% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And individual investors on the other hand have a 38% ownership in the company.
Let's delve deeper into each type of owner of Michael Hill International, beginning with the chart below.
View our latest analysis for Michael Hill International
What Does The Institutional Ownership Tell Us About Michael Hill International?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
As you can see, institutional investors have a fair amount of stake in Michael Hill International. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Michael Hill International's historic earnings and revenue below, but keep in mind there's always more to the story.
We note that hedge funds don't have a meaningful investment in Michael Hill International. Hoglett Hamlet Limited is currently the largest shareholder, with 39% of shares outstanding. Spheria Asset Management Pty Ltd is the second largest shareholder owning 12% of common stock, and Emma Hill holds about 5.0% of the company stock. Emma Hill, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.
A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 51% stake.
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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Michael Hill International
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
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.
We can report that insiders do own shares in Michael Hill International Limited. In their own names, insiders own AU$26m worth of stock in the AU$336m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.
General Public Ownership
The general public, who are usually individual investors, hold a 38% stake in Michael Hill International. 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
We can see that Private Companies own 40%, of the shares on issue. 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:
It's always worth thinking about the different groups who own shares in a company. But to understand Michael Hill International better, we need to consider many other factors. For example, we've discovered 2 warning signs for Michael Hill International (1 is a bit concerning!) that you should be aware of before investing here.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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