Smart Parking Limited's (ASX:SPZ) largest shareholders are private companies who were rewarded as market cap surged AU$43m last week

Key Insights

• Smart Parking's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 3 shareholders own 53% of the company
• 26% of Smart Parking is held by Institutions

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To get a sense of who is truly in control of Smart Parking Limited (ASX:SPZ), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are private companies with 41% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, private companies benefitted the most after the company's market cap rose by AU$43m last week.

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

See our latest analysis for Smart Parking

What Does The Institutional Ownership Tell Us About Smart Parking?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Smart Parking does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Smart Parking's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Smart Parking. Looking at our data, we can see that the largest shareholder is Finico Pty. Ltd. with 26% of shares outstanding. For context, the second largest shareholder holds about 15% of the shares outstanding, followed by an ownership of 12% by the third-largest shareholder. Additionally, the company's CEO Paul Gillespie directly holds 1.2% of the total shares outstanding.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Smart Parking

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

We can report that insiders do own shares in Smart Parking Limited. As individuals, the insiders collectively own AU$12m worth of the AU$362m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 28% stake in Smart Parking. 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.

Private Company Ownership

It seems that Private Companies own 41%, of the Smart Parking stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Smart Parking better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Smart Parking you should be aware of.

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.