Private equity firms are IHS Holding Limited's (NYSE:IHS) biggest owners and were hit after market cap dropped US$187m
Key Insights
IHS Holding's significant private equity firms ownership suggests that the key decisions are influenced by shareholders from the larger public
A total of 3 investors have a majority stake in the company with 56% ownership
Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock
To get a sense of who is truly in control of IHS Holding Limited (NYSE:IHS), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are private equity firms with 36% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And last week, private equity firms endured the biggest losses as the stock fell by 6.2%.
Let's take a closer look to see what the different types of shareholders can tell us about IHS Holding.
See our latest analysis for IHS Holding
What Does The Institutional Ownership Tell Us About IHS Holding?
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.
IHS Holding already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 IHS Holding's earnings history below. Of course, the future is what really matters.
IHS Holding is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is MTN Group Limited with 26% of shares outstanding. Wendel is the second largest shareholder owning 19% of common stock, and Emerging Capital Partners LP holds about 12% of the company stock. Additionally, the company's CEO Sam Darwish directly holds 4.2% of the total shares outstanding.
A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 56% stake.
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 IHS Holding
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 IHS Holding Limited. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around US$191m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public, who are usually individual investors, hold a 18% stake in IHS Holding. 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.
Private Equity Ownership
Private equity firms hold a 36% stake in IHS Holding. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
Public Company Ownership
It appears to us that public companies own 26% of IHS Holding. 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:
It's always worth thinking about the different groups who own shares in a company. But to understand IHS Holding better, we need to consider many other factors.
I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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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