Vulcan Steel's significant insider ownership suggests inherent interests in company's expansion
A total of 10 investors have a majority stake in the company with 51% ownership
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. And the group that holds the biggest piece of the pie are individual insiders with 34% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
So, insiders of Vulcan Steel have a lot at stake and every decision they make on the company’s future is important to them from a financial point of view.
Let's take a closer look to see what the different types of shareholders can tell us about Vulcan Steel.
What Does The Institutional Ownership Tell Us About Vulcan Steel?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
As you can see, institutional investors have a fair amount of stake in Vulcan Steel. 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.
Vulcan Steel is not owned by hedge funds. Peter Wells is currently the company's largest shareholder with 14% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.0% and 6.0%, of the shares outstanding, respectively. In addition, we found that Rhys Jones, the CEO has 1.8% of the shares allocated to their name.
We also observed that the top 10 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Vulcan Steel
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.
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$971m, and insiders have AU$335m 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 group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
It seems that Private Companies own 24%, of the Vulcan Steel stock. 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.
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. Be aware that Vulcan Steel is showing 3 warning signs in our investment analysis , you should know about...
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.
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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.