OUTsurance Group Limited’s (JSE:OUT) largest shareholders are private equity firms with 31% ownership, individual investors own 25%

Key Insights

• OUTsurance Group’s significant private equity firms ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 3 shareholders own 55% of the company
• Insiders have bought recently

If you want to know who really controls OUTsurance Group Limited (JSE:OUT), 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 private equity firms with 31% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And individual investors on the other hand have a 25% ownership in the company.

Let’s delve deeper into each type of owner of OUTsurance Group, beginning with the chart below.

Check out our latest analysis for OUTsurance Group

What Does The Institutional Ownership Tell Us About OUTsurance Group?

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.

OUTsurance Group 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. 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 OUTsurance Group’s earnings history below. Of course, the future is what really matters.

Hedge funds don’t have many shares in OUTsurance Group. Remgro Limited is currently the company’s largest shareholder with 31% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 14% and 10%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company’s shares, implying that they have considerable power to influence the company’s decisions.

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

Insider Ownership Of OUTsurance Group

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.

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 most recent data indicates that insiders own less than 1% of OUTsurance Group Limited. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around R278m worth of shares (at current prices). Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 25% stake in OUTsurance Group. 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 Equity Ownership

With an ownership of 31%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and — as the name suggests — don’t invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

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 find historic revenue and earnings in this detailed graph.

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.

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.