The large shareholder groups of Sasol Limited (JSE:SOL) have power over the company. Big companies usually have institutions as shareholders, and we usually see insiders owning shares in small companies. Companies that were previously publicly owned tend to have less insider ownership.
Sasol is a pretty big company. It has a market capitalization of R207b. Normally, institutions own a significant share of a business of this size. Our analysis of company ownership, below, shows that the institutions are visible on the share register. Let’s take a closer look at what different types of shareholders can tell us about Sasol.
Check out our latest analysis for Sasol
What does institutional ownership tell us about Sasol?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.
We can see that Sasol has institutional investors; and they own a good part of the shares of the company. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be wrong. If multiple institutions change their minds on a stock at the same time, you could see the stock price drop quickly. So it’s worth checking out Sasol’s earnings history below. Of course, the future is what really matters.
Institutional investors own more than 50% of the company, so together they can probably heavily influence board decisions. Sasol does not belong to hedge funds. The company’s largest shareholder is Public Investment Corporation Limited with a 17% stake. The Industrial Development Corporation of South Africa Limited is the second largest shareholder with 8.4% of the ordinary shares, and M&G Investment Management Limited owns approximately 5.9% of the company’s shares.
We also observed that the top 7 shareholders represent more than half of the share register, with some small shareholders to balance the interests of the larger ones to some extent.
Institutional ownership research is a good way to assess and filter a stock’s expected performance. The same can be obtained by studying the feelings of the analyst. There are plenty of analysts covering the stock, so it might be interesting to see what they are predicting as well.
Insider Ownership of Sasol
The definition of an insider may differ slightly from country to country, but board members still matter. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.
Most view insider ownership as a positive because it can indicate that the board is well aligned with other shareholders. However, there are times when too much power is concentrated within this group.
Our most recent data indicates that insiders own less than 1% of Sasol Limited. Being so large, we wouldn’t expect insiders to own a large portion of the shares. Collectively, they own R27 million worth of shares. In this kind of situation, it may be more interesting to see if these insiders have bought or sold.
General public property
The general public, including retail investors, owns 31% of the company’s shares and therefore cannot be easily ignored. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.
I find it very interesting to see who exactly owns a company. But to really get insight, we also need to consider other information. Example: we have identified 3 warning signs for Sasol you should be aware.
If you prefer to 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 using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.