Seven West Media Limited's (ASX:SWM) market cap touched AU$251m last week, benefiting both public companies who own 41% as well as institutions

Key Insights

• Significant control over Seven West Media by public companies implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 2 shareholders
• 31% of Seven West Media is held by Institutions

A look at the shareholders of Seven West Media Limited (ASX:SWM) can tell us which group is most powerful. The group holding the most number of shares in the company, around 41% to be precise, is public companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While public companies were the group that reaped the most benefits after last week’s 10.0% price gain, institutions also received a 31% cut.

Let's delve deeper into each type of owner of Seven West Media, beginning with the chart below.

View our latest analysis for Seven West Media

What Does The Institutional Ownership Tell Us About Seven West Media?

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.

Seven West Media already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Seven West Media'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 Seven West Media. Looking at our data, we can see that the largest shareholder is SGH Limited with 41% of shares outstanding. In comparison, the second and third largest shareholders hold about 10.0% and 6.1% of the stock.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 51% stake.

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 Seven West Media

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

We can report that insiders do own shares in Seven West Media Limited. As individuals, the insiders collectively own AU$5.8m worth of the AU$251m company. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

With a 24% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Seven West Media. 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.

Public Company Ownership

It appears to us that public companies own 41% of Seven West Media. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 2 warning signs for Seven West Media (1 is a bit unpleasant!) that you should be aware of before investing here.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.