Emeco Holdings Limited's (ASX:EHL) largest shareholders are private equity firms who were rewarded as market cap surged AU$34m last week

Key Insights

• Significant control over Emeco Holdings by private equity firms implies that the general public has more power to influence management and governance-related decisions
• A total of 3 investors have a majority stake in the company with 50% ownership
• Institutional ownership in Emeco Holdings is 25%

If you want to know who really controls Emeco Holdings Limited (ASX:EHL), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 35% to be precise, is private equity firms. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, private equity firms benefitted the most after the company's market cap rose by AU$34m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Emeco Holdings.

View our latest analysis for Emeco Holdings

What Does The Institutional Ownership Tell Us About Emeco Holdings?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Emeco Holdings does have institutional investors; and they hold a good portion of the company's stock. 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 Emeco Holdings, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Emeco Holdings. Black Diamond Capital Management, L.L.C. is currently the company's largest shareholder with 35% of shares outstanding. Paradice Investment Management Pty Ltd. is the second largest shareholder owning 10% of common stock, and Vinva Investment Management Limited holds about 4.9% of the company stock. Furthermore, CEO Ian Testrow is the owner of 2.6% of the company's shares.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Emeco Holdings

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

We can report that insiders do own shares in Emeco Holdings Limited. It has a market capitalization of just AU$369m, and insiders have AU$15m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 33% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With a stake of 35%, private equity firms could influence the Emeco Holdings board. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 2 warning signs we've spotted with Emeco Holdings .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.