Are Institutions Heavily Invested In Seeing Machines Limited's (LON:SEE) Shares?

By
Simply Wall St
Published
November 08, 2021
AIM:SEE
Source: Shutterstock

If you want to know who really controls Seeing Machines Limited (LON:SEE), then you'll have to look at the makeup of its share registry. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. We also tend to see lower insider ownership in companies that were previously publicly owned.

Seeing Machines is a smaller company with a market capitalization of UK£414m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions are noticeable on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about Seeing Machines.

View our latest analysis for Seeing Machines

ownership-breakdown
AIM:SEE Ownership Breakdown November 9th 2021

What Does The Institutional Ownership Tell Us About Seeing Machines?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Seeing Machines 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 Seeing Machines' historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
AIM:SEE Earnings and Revenue Growth November 9th 2021

Hedge funds don't have many shares in Seeing Machines. Looking at our data, we can see that the largest shareholder is Lombard Odier Asset Management (Europe) Limited with 18% of shares outstanding. With 9.7% and 9.5% of the shares outstanding respectively, Federated Hermes, Inc. and V.S. Industry Berhad are the second and third largest shareholders.

We did some more digging and found that 8 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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

Insider Ownership Of Seeing Machines

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.

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 see that insiders own shares in Seeing Machines Limited. As individuals, the insiders collectively own UK£16m worth of the UK£414m company. 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 holds a 46% stake in Seeing Machines. 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.

Public Company Ownership

Public companies currently own 9.5% of Seeing Machines stock. 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:

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. To that end, you should be aware of the 2 warning signs we've spotted with Seeing Machines .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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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