Key Insights

The considerable ownership by individual investors in Seven West Media indicates that they collectively have a greater say in management and business strategy The top 5 shareholders own 52% of the company Insiders own 20% of Seven West Media

A look at the shareholders of Seven West Media Limited (ASX:SWM) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual investors with 33% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Meanwhile, public companies make up 23% of the company’s shareholders.

Let's take a closer look to see what the different types of shareholders can tell us about Seven West Media.

See our latest analysis for Seven West Media  ownership-breakdown

What Does The Institutional Ownership Tell Us About Seven West Media?

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 Seven West Media 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 Seven West Media's historic earnings and revenue below, but keep in mind there's always more to the story. earnings-and-revenue-growth

We note that hedge funds don't have a meaningful investment in Seven West Media. Looking at our data, we can see that the largest shareholder is Seven Group Holdings Limited with 23% of shares outstanding. With 17% and 5.0% of the shares outstanding respectively, Kerry Stokes and Spheria Asset Management Pty Ltd are the second and third largest shareholders. Furthermore, CEO James Warburton is the owner of 0.9% of the company's shares.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. 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 Seven West Media

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own a reasonable proportion of Seven West Media Limited. It has a market capitalization of just AU$584m, and insiders have AU$115m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can  click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 33% stake in the company, and hence can't easily be ignored. 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.

Public Company Ownership

It appears to us that public companies own 23% of Seven West Media. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

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. Be aware that  Seven West Media is showing  4 warning signs in our investment analysis, and 2 of those are concerning...

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

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.

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