25-03-2025
PPC Ltd (JSE:PPC) is largely controlled by institutional shareholders who own 68% of the company
Given the large stake in the stock by institutions, PPC's stock price might be vulnerable to their trading decisions
51% of the business is held by the top 4 shareholders
Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
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To get a sense of who is truly in control of PPC Ltd (JSE:PPC), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are institutions with 68% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.
In the chart below, we zoom in on the different ownership groups of PPC.
View our latest analysis for PPC
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.
As you can see, institutional investors have a fair amount of stake in PPC. 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 PPC's earnings history below. Of course, the future is what really matters.
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don't have many shares in PPC. Looking at our data, we can see that the largest shareholder is Value Capital Partners with 16% of shares outstanding. For context, the second largest shareholder holds about 14% of the shares outstanding, followed by an ownership of 10% by the third-largest shareholder.
On looking further, we found that 51% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.
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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 data suggests that insiders own under 1% of PPC Ltd in their own names. However, it's possible that insiders might have an indirect interest through a more complex structure. It has a market capitalization of just R6.2b, and the board has only R30m worth of shares in their own names. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.
The general public, who are usually individual investors, hold a 11% stake in PPC. 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 firms hold a 16% stake in PPC. 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.
It seems that Private Companies own 4.2%, of the PPC stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for PPC that you should be aware of.
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.
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.
