Private companies are Zeder Investments Ltd.'s (JSE:ZED) biggest owners and were rewarded after market cap rose by R277m last week

Key Insights

• The considerable ownership by private companies in Zeder Investments indicates that they collectively have a greater say in management and business strategy
• A total of 2 investors have a majority stake in the company with 58% ownership
• 21% of Zeder Investments is held by Institutions

A look at the shareholders of Zeder Investments Ltd. (JSE:ZED) can tell us which group is most powerful. The group holding the most number of shares in the company, around 49% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private companies collectively scored the highest last week as the company hit R3.0b market cap following a 10% gain in the stock.

Let's delve deeper into each type of owner of Zeder Investments, beginning with the chart below.

See our latest analysis for Zeder Investments

What Does The Institutional Ownership Tell Us About Zeder Investments?

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.

As you can see, institutional investors have a fair amount of stake in Zeder Investments. 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 Zeder Investments, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Zeder Investments. The company's largest shareholder is PSG Group Ltd, with ownership of 49%. With 9.6% and 6.3% of the shares outstanding respectively, Peresec Prime Brokers (Pty) Ltd, Asset Management Arm and Coronation Fund Managers Limited are the second and third largest shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. 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 Zeder Investments

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 information suggests that Zeder Investments Ltd. insiders own under 1% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. It has a market capitalization of just R3.0b, and the board has only R15m worth of shares in their own names. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 30% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 49%, of the Zeder Investments stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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. Case in point: We've spotted 3 warning signs for Zeder Investments you should be aware of, and 2 of them can't be ignored.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.

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