Despite recent sales, Supply Network Limited (ASX:SNL) insiders still control 41% of the company

Key Insights

• Significant insider control over Supply Network implies vested interests in company growth
• A total of 5 investors have a majority stake in the company with 51% ownership
• Recent sales by insiders

Our free stock report includes 1 warning sign investors should be aware of before investing in Supply Network. Read for free now.

A look at the shareholders of Supply Network Limited (ASX:SNL) 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 individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Despite recent sales, insiders own the most shares in the company. As a result, they stand to gain the most after the stock gained 4.8% in the past week.

In the chart below, we zoom in on the different ownership groups of Supply Network.

See our latest analysis for Supply Network

What Does The Institutional Ownership Tell Us About Supply Network?

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.

As you can see, institutional investors have a fair amount of stake in Supply Network. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Supply Network's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Supply Network. The company's largest shareholder is Harry Forsyth, with ownership of 24%. The second and third largest shareholders are Bangarra Group and Peter McKenzie, with an equal amount of shares to their name at 7.4%. Peter McKenzie, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Additionally, the company's CEO Geoffrey David Stewart directly holds 1.4% of the total shares outstanding.

On looking further, we found that 51% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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 Supply Network

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our information suggests that insiders maintain a significant holding in Supply Network Limited. Insiders own AU$703m worth of shares in the AU$1.7b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Supply Network. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 5.2%, of the Supply Network stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Supply Network better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Supply Network you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.