Individual investors who hold 56% of Sanlam Limited (JSE:SLM) gained 4.0%, institutions profited as well

Key Insights

• Significant control over Sanlam by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 25 shareholders own 39% of the company
• Institutions own 27% of Sanlam

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A look at the shareholders of Sanlam Limited (JSE:SLM) can tell us which group is most powerful. The group holding the most number of shares in the company, around 56% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 4.0% increase in the stock price last week, individual investors profited the most, but institutions who own 27% stock also stood to gain from the increase.

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

View our latest analysis for Sanlam

What Does The Institutional Ownership Tell Us About Sanlam?

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 Sanlam does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Sanlam's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Sanlam. Looking at our data, we can see that the largest shareholder is Ubuntu-Botho Investments Proprietary Limited with 14% of shares outstanding. Ninety One UK Limited is the second largest shareholder owning 4.9% of common stock, and The Vanguard Group, Inc. holds about 3.4% of the company stock.

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.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Sanlam

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. 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 most recent data indicates that insiders own less than 1% of Sanlam Limited. However, it's possible that insiders might have an indirect interest through a more complex structure. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own R587m worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 56% stake in Sanlam, suggesting it is a fairly popular stock. 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.

Private Company Ownership

We can see that Private Companies own 14%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.