Home Hedge Funds Sovereign wealth funds account for 52% of Mercury NZ Limited’s (NZSE:MCY) ownership,...

Sovereign wealth funds account for 52% of Mercury NZ Limited’s (NZSE:MCY) ownership, while individual investors account for 35%

Simply Wall St

Every investor in Mercury NZ Limited (NZSE:MCY) should be aware of the most powerful shareholder groups. We can see that sovereign wealth funds own the lion’s share in the company with 52% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Meanwhile, individual investors make up 35% of the company’s shareholders.

Let’s take a closer look to see what the different types of shareholders can tell us about Mercury NZ.

View our latest analysis for Mercury NZ

NZSE:MCY Ownership Breakdown September 24th 2022

What Does The Institutional Ownership Tell Us About Mercury NZ?

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.

We can see that Mercury NZ 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 Mercury NZ’s historic earnings and revenue below, but keep in mind there’s always more to the story.

NZSE:MCY Earnings and Revenue Growth September 24th 2022

Hedge funds don’t have many shares in Mercury NZ. Looking at our data, we can see that the largest shareholder is New Zealand Superannuation Fund with 52% of shares outstanding. This implies that they have majority interest control of the future of the company. State Street Global Advisors, Inc. is the second largest shareholder owning 3.5% of common stock, and Accident Compensation Corporation, Asset Management Arm holds about 2.1% of the company stock.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Mercury NZ

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Mercury NZ Limited. Keep in mind that it’s a big company, and the insiders own NZ$4.2m worth of shares. The absolute value might be more important than the proportional share. 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– including retail investors — own 35% stake in the company, and hence can’t easily be ignored. 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:

It’s always worth thinking about the different groups who own shares in a company. But to understand Mercury NZ better, we need to consider many other factors. For instance, we’ve identified 3 warning signs for Mercury NZ (1 is significant) that you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

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.

Valuation is complex, but we’re helping make it simple.

Find out whether Mercury NZ is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

Source link

Previous articleBloomberg Analyst Says Bitcoin’s Relationship to Commodities Could Hint at a Price Recovery – Here’s Why
Next articleGlobal-e Online Ltd. (NASDAQ:GLBE) Given Consensus Rating of “Buy” by Analysts


Please enter your comment!
Please enter your name here