Sistema Public Joint Stock Financial Corporation (MCX:AFKS) Top Key Executive Vladimir Evtushenkov, the company's largest shareholder sees 8.6%reduction in holdings value

By
Simply Wall St
Published
January 15, 2022
MISX:AFKS
Source: Shutterstock

If you want to know who really controls Sistema Public Joint Stock Financial Corporation (MCX:AFKS), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 68% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to ₽208b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

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

See our latest analysis for Sistema Financial

ownership-breakdown
MISX:AFKS Ownership Breakdown January 15th 2022

What Does The Institutional Ownership Tell Us About Sistema Financial?

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 Sistema Financial 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 Sistema Financial's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
MISX:AFKS Earnings and Revenue Growth January 15th 2022

Hedge funds don't have many shares in Sistema Financial. Our data suggests that Vladimir Evtushenkov, who is also the company's Top Key Executive, holds the most number of shares at 60%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. For context, the second largest shareholder holds about 5.3% of the shares outstanding, followed by an ownership of 1.3% by the third-largest shareholder. Interestingly, the second-largest shareholder, Evtushenkov Vladimirovich is also Member of Management Board, again, pointing towards strong insider ownership amongst the company's top shareholders.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Sistema Financial

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. 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.

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 own more than half of Sistema Public Joint Stock Financial Corporation. This gives them effective control of the company. That means insiders have a very meaningful ₽142b stake in this ₽208b business. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

With a 22% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sistema Financial. 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.

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 - Sistema Financial has 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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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