In this analysis, my focus will be on developing a perspective on Sealand Capital Galaxy Limited’s (LSE:SCGL) latest ownership structure, a less discussed, but important factor. Ownership structure of a company has been found to affect share performance over time. The same amount of capital coming from an activist institution and a passive mutual fund has different implications on corporate governance, which is a decisive factor for a long-term investor. It also impacts the trading environment of company shares, which is more of a concern for short-term investors. Therefore, it is beneficial for us to examine SCGL’s ownership structure in more detail.
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Insider Ownership
I find insiders are another important group of stakeholders, who are directly involved in making key decisions related to the use of capital. In essence, insider ownership is more about the alignment of shareholders’ interests with the management. With 6.34% ownership, SCGL insiders is an important ownership type. This level of ownership indicates closely aligned interests of shareholders and management. I will also like to check what insiders have been doing recently with their holdings. insider buying may be a sign of upbeat future expectations, however, selling doesn’t necessarily mean the opposite as insiders may be motivated by their personal financial needs.General Public Ownership
A big stake of 93.66% in SCGL is held by the general public. This size of ownership gives retail investors collective power in deciding on major policy decisions such as executive compensation, appointment of directors and acquisitions of businesses. Such level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and potential acquisitions. This is a positive sign for an investor who wants to be involved in key decision-making of the company.Final words
A relatively significant holding of company insiders could mean high alignment with shareholders. But at the same time, potential investors should be aware of the level of influence executives could have on governance decisions. However, other important factors we must never forget to assess are the fundamentals. I recommend you take a look at our latest free analysis report on Sealand Capital Galaxy to see SCGL’s fundamentals and whether it could be considered an undervalued opportunity.
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