Vulcan Steel Limited (ASX:VSL) boasts of bullish insider sentiment with 34% ownership and they have been buying lately
Key Insights
Insiders appear to have a vested interest in Vulcan Steel's growth, as seen by their sizeable ownership
A total of 10 investors have a majority stake in the company with 52% ownership
Recent purchases by insiders
If you want to know who really controls Vulcan Steel Limited (ASX:VSL), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 34% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).
And looking at our data, we can see that insiders have bought shares recently. This could be interpreted as insiders anticipating a rise in stock prices in the near future.
In the chart below, we zoom in on the different ownership groups of Vulcan Steel.
View our latest analysis for Vulcan Steel
What Does The Institutional Ownership Tell Us About Vulcan Steel?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
Vulcan Steel already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Vulcan Steel, (below). Of course, keep in mind that there are other factors to consider, too.
We note that hedge funds don't have a meaningful investment in Vulcan Steel. Our data shows that Peter Wells is the largest shareholder with 14% of shares outstanding. Vulcan Continuity Trust is the second largest shareholder owning 7.0% of common stock, and Forsyth Barr Investment Management Limited holds about 6.0% of the company stock. In addition, we found that Rhys Jones, the CEO has 1.8% of the shares allocated to their name.
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 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Vulcan Steel
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.
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.
It seems insiders own a significant proportion of Vulcan Steel Limited. It has a market capitalization of just AU$1.0b, and insiders have AU$362m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.
General Public Ownership
The general public, who are usually individual investors, hold a 24% stake in Vulcan Steel. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Private Company Ownership
Our data indicates that Private Companies hold 24%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 3 warning signs we've spotted with Vulcan Steel .
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.
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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.
