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A look at the shareholders of MJ Gleeson plc (LON: GLE) can tell us which group is more powerful. Large companies usually have institutions as shareholders, and we usually see insiders holding shares in smaller companies. Warren Buffett said he enjoys “a business with sustainable competitive advantages, led by skilled people and owner-centered.” So it’s nice to see some insider ownership as it may suggest that the management is owner-driven.
MJ Gleeson is not a large company by global standards. It has a market cap of £ 483million, which means it wouldn’t have the attention of many institutional investors. Our analysis of company ownership, below, shows that institutional investors bought the company. Let’s take a closer look at what different types of shareholders can tell us about Mr. J. Gleeson.
See our latest review for MJ Gleeson
What does institutional ownership tell us about MJ Gleeson?
Many institutions measure their performance against an index that approximates the local market. Thus, they generally pay more attention to companies that are included in the major indices.
Mr. J. Gleeson already has institutions entered in the share register. Indeed, they hold a respectable stake in the company. This suggests some credibility among professional investors. But we cannot trust this fact alone because institutions sometimes make bad investments, like everyone else. When several institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes awry, several parties may compete with each other to sell stocks quickly. This risk is higher in a company without a history of growth. You can see MJ Gleeson’s historical income and earnings below, but keep in mind that there is always more to tell.
Investors should note that institutions actually own more than half of the business, so they can collectively wield significant power. We note that the hedge funds do not have a significant investment in MJ Gleeson. Harwood Capital LLP is currently the largest shareholder in the company with 10% of the shares outstanding. With 8.2% and 7.8% of shares outstanding, respectively, Schroder Investment Management Limited and Castlefield Investment Partners LLP are the second and third largest shareholders.
We also observed that the top 10 shareholders make up more than half of the share register, with a few smaller shareholders to some extent to balance the interests of the larger ones.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand the expected performance of a stock. There are a lot of analysts covering the stock, so you can look at expected growth quite easily.
Insider property of MJ Gleeson
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management ultimately reports to the board of directors. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.
Insider ownership is positive when it indicates that executives think like the real owners of the company. However, strong 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 the insiders own shares in MJ Gleeson plc. As individuals, insiders collectively own £ 30million worth of the company £ 483million. Some would say it shows the alignment of interests between shareholders and the board. But it might be worth checking out if these insiders have sold.
General public property
The general public, with a 17% stake in the company, will not be easily ignored. While this group cannot necessarily take the lead, it can certainly have a real influence on how the business is run.
Next steps:
I find it very interesting to see who exactly owns a company. But to really understand better, we have to take other information into account as well. Be aware that MJ Gleeson watch 1 warning sign in our investment analysis , you must know…
If you’d rather find out what analysts are predicting in terms of future growth, don’t miss this free analyst forecast report.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in the mentioned stocks.
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