key insights
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Magellan Financial Group is dominated by retail investors, suggesting that key decisions are influenced by general shareholders.
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A total of 25 investors hold a majority stake in the company, holding 45% of the ownership.
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40% of Magellan Financial Group's shares are held by institutional investors
To understand who actually controls Magellan Financial Group Limited (ASX:MFG), it's important to understand the ownership structure of the business. The group with the biggest pie is individual investors, who own 54% of the stock. That is, if the stock price rises, the group will gain the most (or if the stock price falls, it will suffer the maximum loss).
Meanwhile, institutional investors account for 40% of the company's shareholders. Institutions often own shares in more established companies, while it's not uncommon to see insiders own a fair bit of smaller companies.
Let's delve deeper into each type of owner at Magellan Financial Group, starting from the chart below.
Check out our latest analysis for Magellan Financial Group.
What does institutional ownership tell us about Magellan Financial Group?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they usually consider buying larger companies that are included in the relevant benchmark index.
Magellan Financial Group already has a share registry. In fact, they own a significant stake in the company. This implies the analysts working for these institutions have considered the stock and they like it. But just like anyone else, they can be wrong. If multiple financial institutions change their view on a stock at the same time, you could see the stock price drop fast. It is therefore worth checking Magellan Financial Group's earnings history, below. Of course, what really matters is the future.
Note that hedge funds don't have a meaningful investment in Magellan Financial Group. The company's largest shareholder is BlackRock, Inc., with an ownership of 8.2%. UBS Asset Management AG and State Street Global Advisors, Inc. hold 4.9% and 4.7% of the shares outstanding, respectively, making them the second and third largest shareholders.
Our research shows that the top 25 shareholders collectively control less than half of the company's shares. This means that the company's shares are widely distributed 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 plenty of analysts covering the stock, so it might be worth seeing what they are predicting.
Insider ownership in Magellan Financial Group
The definition of an insider may vary slightly from country to country, but members of the board of directors are always considered. Management ultimately answers to the board. However, it is not uncommon for managers to be members of the board of directors. This is especially true if the manager is the founder or CEO.
I generally consider insider ownership to be a good thing. However, in some cases, it may be more difficult for other shareholders to hold the board accountable for decisions.
Our most recent data indicates that insiders own some shares in Magellan Financial Group Limited. Insiders own significant shares worth AU$52m. Most people would consider this a very positive thing. If you want to know more about insider alignment issues, click here to see if insiders have been buying or selling.
Open to the public
The general public, mostly retail investors, collectively owns 54% of Magellan Financial Group's shares. With this level of ownership, individual investors can collectively play a role in decisions that affect shareholder returns, such as dividend policy and the appointment of directors. They also have the power to vote on acquisitions and mergers that may not improve profitability.
Next steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important.Case in point: we discovered 3 warning signs for Magellan Financial Group One of them cannot be ignored.
If you're like me, you might want to consider whether this company will grow or shrink. Luckily you can check this free report showing analyst forecasts for its future.
Note: The numbers in this article are calculated using data from the previous 12 months and refer to the 12-month period ending on the last day of the month in which the financial statements are dated. This may not match the full year annual report figures.
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This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
