Stock Analysis

Is Shaver Shop Group Limited (ASX:SSG) Popular Amongst Insiders?

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ASX:SSG
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A look at the shareholders of Shaver Shop Group Limited (ASX:SSG) can tell us which group is most powerful. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

Shaver Shop Group is not a large company by global standards. It has a market capitalization of AU$142m, which means it wouldn't have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholders can tell us about Shaver Shop Group.

Check out our latest analysis for Shaver Shop Group

ownership-breakdown
ASX:SSG Ownership Breakdown December 5th 2020

What Does The Institutional Ownership Tell Us About Shaver Shop Group?

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 Shaver Shop Group 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 Shaver Shop Group's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
ASX:SSG Earnings and Revenue Growth December 5th 2020

Hedge funds don't have many shares in Shaver Shop Group. Alsop Pty Limited is currently the largest shareholder, with 11% of shares outstanding. Perpetual Investments Management Limited is the second largest shareholder owning 9.7% of common stock, and Microequities Asset Management Pty Limited holds about 5.0% of the company stock. Additionally, the company's CEO Cameron Fox directly holds 3.7% of the total shares outstanding.

A closer look at our ownership figures suggests that the top 12 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Shaver Shop Group

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

Our information suggests that insiders maintain a significant holding in Shaver Shop Group Limited. Insiders have a AU$18m stake in this AU$142m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public holds a 47% stake in Shaver Shop Group. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

It seems that Private Companies own 14%, of the Shaver Shop Group 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - Shaver Shop Group has 1 warning sign we think you should be aware of.

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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