a day ago
GR Engineering Services Limited's (ASX:GNG) largest shareholders are individual investors with 39% ownership, insiders own 36%
GR Engineering Services' significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
51% of the business is held by the top 11 shareholders
36% of GR Engineering Services is held by insiders
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To get a sense of who is truly in control of GR Engineering Services Limited (ASX:GNG), it is important to understand the ownership structure of the business. With 39% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Meanwhile, individual insiders make up 36% of the company's shareholders. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.
In the chart below, we zoom in on the different ownership groups of GR Engineering Services.
View our latest analysis for GR Engineering Services
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.
Since institutions own only a small portion of GR Engineering Services, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.
Hedge funds don't have many shares in GR Engineering Services. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In GR Engineering Services' case, its Chief Operating Officer, David Sala Tenna, is the largest shareholder, holding 7.4% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 6.2% and 5.9%, of the shares outstanding, respectively. Additionally, the company's CEO Tony Patrizi directly holds 5.9% of the total shares outstanding.
A closer look at our ownership figures suggests that the top 11 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our most recent data indicates that insiders own a reasonable proportion of GR Engineering Services Limited. It has a market capitalization of just AU$512m, and insiders have AU$185m 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.
The general public, who are usually individual investors, hold a 39% stake in GR Engineering Services. 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.
It seems that Private Companies own 20%, of the GR Engineering Services 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.
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 1 warning sign we've spotted with GR Engineering Services .
If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.
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) 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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