Seeing Machines Limited's (LON:SEE) largest shareholders are individual investors who were rewarded as market cap surged UK£17m last week

Key Insights

• Significant control over Seeing Machines by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 14 investors have a majority stake in the company with 48% ownership
• Insiders have bought recently

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

To get a sense of who is truly in control of Seeing Machines Limited (LON:SEE), it is important to understand the ownership structure of the business. With 52% stake, individual investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, individual investors collectively scored the highest last week as the company hit UK£126m market cap following a 16% gain in the stock.

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

Check out our latest analysis for Seeing Machines

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.

Seeing Machines already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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.

We note that hedge funds don't have a meaningful investment in Seeing Machines. Mitsubishi Electric Corporation is currently the company's largest shareholder with 20% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 10% and 6.1%, of the shares outstanding, respectively.

Our studies suggest that the top 14 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Seeing Machines

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 Seeing Machines Limited insiders own under 1% of the company. It has a market capitalization of just UK£126m, and the board has only UK£800k worth of shares in their own names. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 52% of Seeing Machines. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Public Company Ownership

It appears to us that public companies own 24% of Seeing Machines. 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 learn about the 3 warning signs we've spotted with Seeing Machines (including 1 which is a bit concerning) .

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.