Institutional investors in Malita Investments p.l.c. (MTSE:MLT) must be dismayed after prices dropped by 13% last week

Key Insights

• Institutions' substantial holdings in Malita Investments implies that they have significant influence over the company's share price
• Malta Government Investments Ltd. owns 57% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of Malita Investments p.l.c. (MTSE:MLT), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are institutions with 57% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Unfortunately, institutional ended up on the other end of the spectrum as market cap fell by €15m.

In the chart below, we zoom in on the different ownership groups of Malita Investments.

Check out our latest analysis for Malita Investments

What Does The Institutional Ownership Tell Us About Malita Investments?

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.

Malita Investments 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. 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 Malita Investments' earnings history below. Of course, the future is what really matters.

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Malita Investments is not owned by hedge funds. The company's largest shareholder is Malta Government Investments Ltd., with ownership of 57%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Meanwhile, the second largest shareholder is HSBC Global Asset Management (UK) Limited holding 0.5%.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Malita Investments

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.

Our data cannot confirm that board members are holding shares personally. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO.

General Public Ownership

With a 43% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Malita Investments. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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. Consider for instance, the ever-present spectre of investment risk. We've identified 6 warning signs with Malita Investments (at least 2 which make us uncomfortable) , and understanding them should be part of your investment process.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.