Yahoo Finance After buying recently, Mader Group Limited (ASX:MAD) insiders must be dismayed to see the company's market cap drop to AU$1.3b
Key Insights
Mader Group's significant insider ownership suggests inherent interests in company's expansion
Luke Mader owns 57% of the company
If you want to know who really controls Mader Group Limited (ASX:MAD), 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 77% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
It's interesting to note that insiders have been buying shares recently. Their expectations, however, were not satisfied, as the market cap dropped to AU$1.3b over the past week.
Let's delve deeper into each type of owner of Mader Group, beginning with the chart below.
View our latest analysis for Mader Group
What Does The Institutional Ownership Tell Us About Mader Group?
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.
Since institutions own only a small portion of Mader Group, 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. So if the company itself can improve over time, we may well see more institutional buyers in the future. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.
Hedge funds don't have many shares in Mader Group. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Mader Group's case, its Top Key Executive, Luke Mader, is the largest shareholder, holding 57% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 20% and 1.1%, of the shares outstanding, respectively.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Mader Group
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.
Our most recent data indicates that insiders own the majority of Mader Group Limited. This means they can collectively make decisions for the company. That means they own AU$992m worth of shares in the AU$1.3b company. That's quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 20% stake in Mader Group. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important.
I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.
