The large shareholder groups of YeboYethu (RF) Limited (JSE:YYLBEE) hold power over the company. Generally speaking, as a company grows, institutions increase their ownership. Conversely, insiders often decrease their ownership over time. Companies that were previously publicly owned tend to have less insider ownership.
YeboYethu (RF) is a small company with a market capitalization of R2.1b, so it may still fly under the radar of many institutional investors. Looking at our ownership group data (below), it appears that institutional investors have bought the company. Let’s take a closer look at what different types of shareholders can tell us about YeboYethu (RF).
Check out our latest analysis for YeboYethu (RF)
What does institutional ownership tell us about YeboYethu (RF)?
Institutional investors typically compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.
As you can see, institutional investors hold a sizeable share of YeboYethu (RF). This may indicate that the company has some degree of credibility in the investment community. However, it is better to be wary of relying on the so-called validation that accompanies institutional investors. They are also sometimes wrong. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see YeboYethu (RF)’s historical revenue and earnings below, but keep in mind there’s always more to the story.
Hedge funds don’t have a lot of shares in YeboYethu (RF). Royal Bafokeng Platinum Limited is currently the largest shareholder, with 29% of the outstanding shares. For context, the second shareholder owns approximately 22% of the outstanding shares, followed by a 2.3% ownership by the third shareholder.
To make our study more interesting, we found that the top 2 shareholders hold a majority stake in the company, which means they are powerful enough to influence company decisions.
Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be obtained by studying the feelings of the analyst. As far as we can tell, there’s no analyst coverage of the company, so it’s probably flying under the radar.
Insider property of YeboYethu (RF)
The definition of an insider may differ slightly from country to country, but board members still matter. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.
Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
Our information suggests that insiders of YeboYethu (RF) Limited own less than 1% of the company. We note, however, that insiders may have an indirect interest through a private company or other corporate structure. It has a market capitalization of just R2.1 billion and the board has only R15 million worth of shares in its own name. Many tend to prefer to see a board with larger holdings. A good next step might be to take a look at this free summary of insider buying and selling.
General public property
The general public, usually individual investors, owns 45% of the capital of YeboYethu (RF). Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.
Private Company Ownership
Our data indicates that private companies hold 3.4% of the company’s shares. It might be worth exploring this further. If related parties, such as insiders, have an interest in any of these private companies, this must be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Ownership of a public company
It appears to us that public companies hold 29% of YeboYethu (RF). It’s hard to say for sure, but it suggests they have intertwined business interests. This could be a strategic stake, so it’s worth monitoring this space for ownership changes.
I find it very interesting to see who exactly owns a company. But to really get insight, we also need to consider other information. Take risks by example – YeboYethu (RF) has 3 warning signs (and 1 that shouldn’t be ignored) that we think you should know about.
Sure this may not be the best stock to buy. So take a look at this free free list of interesting companies.
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.