What does the ownership structure of Keywords Studios plc (LON:KWS) look like?

If you want to know who really controls Keywords Studios plc (LON:KWS), then you’ll have to look at the makeup of their share registry. Big companies usually have institutions as shareholders, and we usually see insiders owning shares in small companies. Companies that have been privatized tend to have low insider ownership.

Keywords Studios has a market capitalization of £1.8 billion, so we expect some institutional investors to have taken notice of the stock. In the graph below, we can see that the institutions are visible on the share register. Let’s take a closer look at what different types of shareholders can tell us about Keywords Studios.

See our latest analysis for Keywords Studios

GOAL: Distribution of KWS ownership on June 5, 2022

What does institutional ownership tell us about Keywords Studios?

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.

As you can see, institutional investors own a sizeable share of Keywords Studios. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be wrong. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Keywords Studios’ revenue and historical revenue below, but keep in mind there’s always more to tell.

earnings-and-revenue-growth
GOAL: KWS profit and revenue growth June 5, 2022

Since institutional investors own more than half of the issued shares, the board will likely have to pay attention to their preferences. Keywords Studios is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Capital Research and Management Company with 8.3% of shares outstanding. In comparison, the second and third shareholders hold approximately 5.1% and 5.0% of the shares.

Looking at the shareholder register, we can see that 51% of the ownership is controlled by the top 15 shareholders, which means that no shareholder has a majority stake in the ownership.

While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. There are plenty of analysts covering the stock, so it might be interesting to see what they are predicting as well.

Insider Property of Keywords Studios

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 runs the company, but the CEO will answer to the board of directors, even if he is a member of it.

Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.

Our data suggests that insiders own less than 1% of Keywords Studios plc in their own name. However, insiders may have an indirect interest through a more complex structure. It’s a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case, insiders hold £14 million worth of shares. It’s always good to see at least some insider ownership, but it might be worth checking to see if those insiders have sold.

General public property

The general public, including retail investors, owns 10% of the company’s capital and therefore cannot be easily ignored. While this size of ownership may not be enough to sway a policy decision in their favor, they can still have a collective impact on company policies.

Private equity ownership

With a 5.0% stake, private equity firms could influence Keywords Studios’ board. Sometimes we see private capital sticking around for the long haul, but generally they have a shorter investment horizon and, as the name suggests, don’t invest heavily in public companies. After a while, they may look to sell and redeploy capital elsewhere.

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.

Many find it useful to take an in-depth look at a company’s performance in the past. You can access this detailed graph past profits, revenue and cash flow.

But finally it’s the future, not the past, that will determine the success of the owners of this business. Therefore, we think it’s advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.

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.

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