Mainfreight Limited (NZSE:MFT) most popular amongst retail investors who own 49% of the shares, institutions hold 33%

Key Insights

• Mainfreight's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 49% of the business is held by the top 25 shareholders
• Insider ownership in Mainfreight is 18%

If you want to know who really controls Mainfreight Limited (NZSE:MFT), then you'll have to look at the makeup of its share registry. We can see that retail investors own the lion's share in the company with 49% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Meanwhile, institutions make up 33% of the company’s shareholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.

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

View our latest analysis for Mainfreight

What Does The Institutional Ownership Tell Us About Mainfreight?

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.

Mainfreight 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Mainfreight, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Mainfreight. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Mainfreight's case, its Top Key Executive, Bruce Plested, is the largest shareholder, holding 15% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.8% and 3.3%, of the shares outstanding, respectively. Furthermore, CEO Donald Braid is the owner of 2.9% of the company's shares.

Our studies suggest that the top 25 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 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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Mainfreight

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 Mainfreight Limited. It has a market capitalization of just NZ$7.0b, and insiders have NZ$1.3b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 49% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Mainfreight. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Mainfreight better, we need to consider many other factors.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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.