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Wall Street JournalEN
ZIM Integrated Shipping Services Ltd.'s (NYSE:ZIM) large institutional owners must be happy as stock continues to impress, up 4.0% over the past week
Key Insights
- Significantly high institutional ownership implies ZIM Integrated Shipping Services' stock price is sensitive to their trading actions
- A total of 25 investors have a majority stake in the company with 42% ownership
- Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company
To get a sense of who is truly in control of ZIM Integrated Shipping Services Ltd. (NYSE:ZIM), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 53% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Last week’s 4.0% gain means that institutional investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. One-year return to shareholders is currently 68% and last week’s gain was the icing on the cake.
Let's delve deeper into each type of owner of ZIM Integrated Shipping Services, beginning with the chart below.
Check out our latest analysis for ZIM Integrated Shipping Services
What Does The Institutional Ownership Tell Us About ZIM Integrated Shipping Services?
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 have a fair amount of stake in ZIM Integrated Shipping Services. 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 ZIM Integrated Shipping Services' historic earnings and revenue below, but keep in mind there's always more to the story.
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don't have many shares in ZIM Integrated Shipping Services. Looking at our data, we can see that the largest shareholder is Renaissance Technologies LLC with 4.8% of shares outstanding. For context, the second largest shareholder holds about 3.4% of the shares outstanding, followed by an ownership of 3.1% by the third-largest shareholder. Furthermore, CEO Eliyahu Glickman is the owner of 1.2% of the company's shares.
Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of ZIM Integrated Shipping Services
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.
We can see that insiders own shares in ZIM Integrated Shipping Services Ltd.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around US$20m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public-- including retail investors -- own 46% 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.
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 for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with ZIM Integrated Shipping Services (at least 1 which can't be ignored) , and understanding them should be part of your investment process.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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.