Adcock Ingram Holdings Limited (JSE:AIP) stock most popular amongst private equity firms who own 58%, while individual investors hold 25%
- Private Equity
- December 28, 2022
- No Comment
If you want to know who really controls Adcock Ingram Holdings Limited (JSE:AIP), 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 private equity firms with 58% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Meanwhile, individual investors make up 25% of the company’s shareholders.
Let’s take a closer look to see what the different types of shareholders can tell us about Adcock Ingram Holdings.
View our latest analysis for Adcock Ingram Holdings
What Does The Institutional Ownership Tell Us About Adcock Ingram Holdings?
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.
Adcock Ingram Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Adcock Ingram Holdings, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don’t have many shares in Adcock Ingram Holdings. The company’s largest shareholder is BB Investment Co. (Pty) Ltd., with ownership of 58%. This implies that they have majority interest control of the future of the company. In comparison, the second and third largest shareholders hold about 9.9% and 1.5% of the stock.
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. There is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of Adcock Ingram Holdings
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our most recent data indicates that insiders own less than 1% of Adcock Ingram Holdings Limited. It appears that the board holds about R1.1m worth of stock. This compares to a market capitalization of R8.1b. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.
General Public Ownership
With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Adcock Ingram Holdings. 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 Ownership
With an ownership of 58%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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.
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 Adcock Ingram Holdings is showing 2 warning signs in our investment analysis , and 1 of those is concerning…
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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.
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