Key Insights

• Significant control over ArcelorMittal South Africa by public companies implies that the general public has more power to influence management and governance-related decisions

• 69% of the company is held by a single shareholder (ArcelorMittal S.A.)

• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

A look at the shareholders of ArcelorMittal South Africa Limited (JSE:ACL) can tell us which group is most powerful. We can see that public companies own the lion's share in the company with 69% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, public companies were the biggest beneficiaries of last week’s 33% gain.

Let's delve deeper into each type of owner of ArcelorMittal South Africa, beginning with the chart below.

View our latest analysis for ArcelorMittal South Africa

What Does The Lack Of Institutional Ownership Tell Us About ArcelorMittal South Africa?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. ArcelorMittal South Africa might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

ArcelorMittal South Africa is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is ArcelorMittal S.A. with 69% of shares outstanding. This implies that they have majority interest control of the future of the company. With 8.3% and 6.2% of the shares outstanding respectively, The Industrial Development Corporation of South Africa Limited and Noluthando Gosa are the second and third largest shareholders.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of ArcelorMittal South Africa

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

We can report that insiders do own shares in ArcelorMittal South Africa Limited. It has a market capitalization of just R1.9b, and insiders have R117m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board, though we generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.

General Public Ownership

With a 16% ownership, the general public, mostly comprising of individual investors, have some degree of sway over ArcelorMittal South Africa. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

It appears to us that public companies own 69% of ArcelorMittal South Africa. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for ArcelorMittal South Africa you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.