Mr Price Group Limited's (JSE:MRP) 4.0% loss last week hit both individual investors who own 41% as well as institutions
Key Insights
Mr Price Group's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
50% of the business is held by the top 21 shareholders
34% of Mr Price Group is held by Institutions
A look at the shareholders of Mr Price Group Limited (JSE:MRP) can tell us which group is most powerful. With 41% stake, individual investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
Following a 4.0% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 34% stock also took a hit.
Let's delve deeper into each type of owner of Mr Price Group, beginning with the chart below.
View our latest analysis for Mr Price Group
What Does The Institutional Ownership Tell Us About Mr Price Group?
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.
We can see that Mr Price Group does have institutional investors; and they hold a good portion of the company's stock. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Mr Price Group's earnings history below. Of course, the future is what really matters.
Hedge funds don't have many shares in Mr Price Group. Public Investment Corporation Limited is currently the largest shareholder, with 20% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.4% and 3.8%, of the shares outstanding, respectively. In addition, we found that Mark Blair, the CEO has 0.5% of the shares allocated to their name.
After doing some more digging, we found that the top 21 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Mr Price Group
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.
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.
We can see that insiders own shares in Mr Price Group Limited. This is a big company, so it is good to see this level of alignment. Insiders own R784m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.
General Public Ownership
The general public, who are usually individual investors, hold a 41% stake in Mr Price Group. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 2 warning signs for Mr Price Group you should be aware of.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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.
