What does the ownership structure of Aferian Plc (LON:AFRN) look like?

Each investor in Aferian Plc (LON:AFRN) should know the most powerful shareholder groups. Institutions often own shares in larger companies, and we expect to see insiders owning a noticeable percentage of smaller ones. Companies that were previously publicly owned tend to have less insider ownership.

With a market capitalization of £113 million, Aferian is a small cap stock, so it may not be well known to many institutional investors. In the chart below, we can see that institutional investors have bought the company. Let’s dig deeper into each owner type to learn more about Aferian.

See our latest review for Aferian

distribution of property

What does institutional ownership tell us about Aferian?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.

As you can see, institutional investors own a sizeable portion of Aferian. This may indicate that the company has some degree of credibility in the investment community. However, it is better to be wary of relying on the so-called validation that accompanies institutional investors. They are also sometimes wrong. If multiple institutions change their minds on a stock at the same time, you could see the stock price drop quickly. So it’s worth checking out Aferian’s earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth

earnings-and-revenue-growth

Investors should note that institutions actually own more than half of the company, so they can collectively wield significant power. We note that hedge funds have no significant investment in Aferian. Looking at our data, we can see that the largest shareholder is Kestrel Partners LLP with 23% of the shares outstanding. With 17% and 11% of the outstanding shares respectively, Premier Fund Managers Limited and Investec Wealth & Investment Limited are the second and third largest shareholders. Additionally, CEO Donald McGarva owns 0.7% of the company’s stock.

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

While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. There are a reasonable number of analysts covering the stock, so it can be useful to know their overall view on the future.

Aferian Insider Ownership

The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.

Most view insider ownership as a positive because it can indicate that the board is well aligned with other shareholders. However, there are times when too much power is concentrated within this group.

Shareholders would probably be interested to learn that insiders hold shares of Aferian Plc. As individuals, insiders collectively hold £4.1m worth of the £113m company. It’s good to see insider investing, but we generally like to see higher insider holdings. it might be worth checking out if these insiders bought.

General public property

The general public, usually individual investors, holds 11% of Aferian’s capital. This size of ownership, although considerable, may not be sufficient to change company policy if the decision is not in line with other major shareholders.

Private Company Ownership

Our data indicates that private companies hold 4.0% of the company’s shares. Private companies can be related parties. Sometimes insiders have an interest in a public company through a stake in a private company, rather than in their own capacity as individuals. Although it is difficult to draw general conclusions, it should be noted that this is an area for further research.

Next steps:

I find it very interesting to see who exactly owns a business. But to really get insight, we also need to consider other information. For example, we have identified 3 warning signs for Aferian of which you should be aware.

If you prefer to find out what analysts are predicting in terms of future growth, don’t miss this free analyst forecast report.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

Feedback on this article? Concerned about content? Get in touch with us directly. You can also email the editorial team (at) Simplywallst.com.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.