Home Private Equity IHS Holding Limited’s (NYSE:IHS) market cap dropped US$327m last week; Private equity...

IHS Holding Limited’s (NYSE:IHS) market cap dropped US$327m last week; Private equity firms bore the brunt

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Simply Wall St

Key Insights

  • The considerable ownership by private equity firms in IHS Holding indicates that they collectively have a greater say in management and business strategy
  • 56% of the business is held by the top 3 shareholders
  • Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

Every investor in IHS Holding Limited (NYSE:IHS) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 36% to be precise, is private equity firms. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to US$1.0b last week, private equity firms would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of IHS Holding.

Check out our latest analysis for IHS Holding

ownership-breakdown
NYSE:IHS Ownership Breakdown February 4th 2024

What Does The Institutional Ownership Tell Us About IHS Holding?

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.

IHS Holding already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 IHS Holding, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NYSE:IHS Earnings and Revenue Growth February 4th 2024

Hedge funds don’t have many shares in IHS Holding. Our data shows that MTN Group Limited is the largest shareholder with 26% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 19% and 12%, of the shares outstanding, respectively. Additionally, the company’s CEO Sam Darwish directly holds 4.2% of the total shares outstanding.

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.

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

Insider Ownership Of IHS Holding

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 some shares in IHS Holding Limited. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around US$69m worth of shares (at current prices). If you would like to explore the question of insider alignment, 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 18% stake in IHS Holding. 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

Private equity firms hold a 36% stake in IHS Holding. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Public Company Ownership

It appears to us that public companies own 26% of IHS Holding. We can’t be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand IHS Holding better, we need to consider many other factors.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.

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

Find out whether IHS Holding 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

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.

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