Key Insights

Institutions' substantial holdings in KMD Brands implies that they have significant influence over the company's share price A total of 9 investors have a majority stake in the company with 51% ownership Insiders have been buying lately

If you want to know who really controls KMD Brands Limited (NZSE:KMD), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 43% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).

Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.

Let's delve deeper into each type of owner of KMD Brands, beginning with the chart below.

Check out our latest analysis for KMD Brands  ownership-breakdown

What Does The Institutional Ownership Tell Us About KMD Brands?

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

KMD Brands 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 KMD Brands, (below). Of course, keep in mind that there are other factors to consider, too. earnings-and-revenue-growth

KMD Brands is not owned by hedge funds. Our data shows that Orbis Investment Management Limited is the largest shareholder with 11% of shares outstanding. New Zealand Superannuation Fund is the second largest shareholder owning 9.2% of common stock, and Harbour Asset Management Limited holds about 6.5% of the company stock.



We did some more digging and found that 9 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of KMD Brands

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.

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 less than 1% of KMD Brands Limited. But they may have an indirect interest through a corporate structure that we haven't picked up on. It has a market capitalization of just NZ$605m, and the board has only NZ$2.1m worth of shares in their own names. Many investors in smaller companies prefer to see the board more heavily invested. You can  click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 41% stake in KMD Brands. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 6.9%, of the KMD Brands stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand KMD Brands better, we need to consider many other factors. Be aware that  KMD Brands is showing  1 warning sign in our investment analysis, you should know about...

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.

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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.