Key Insights
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Meridian Energy's significant state or government ownership suggests that the key decisions are influenced by shareholders from the larger public
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The largest shareholder of the company is New Zealand with a 51% stake
Every investor in Meridian Energy Limited ( NZSE:MEL ) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are state or government with 51% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Individual investors, on the other hand, account for 37% of the company's stockholders.
Let's delve deeper into each type of owner of Meridian Energy, beginning with the chart below.
See our latest analysis for Meridian Energy
What Does The Institutional Ownership Tell Us About Meridian Energy?
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.
Meridian Energy already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Meridian Energy, (below). Of course, keep in mind that there are other factors to consider, too.
Meridian Energy is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is New Zealand with 51% of shares outstanding. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 2.1% of the shares outstanding, followed by an ownership of 1.9% by the third-largest shareholder.
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. 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 Meridian Energy
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 data suggests that insiders own under 1% of Meridian Energy Limited in their own names. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own NZ$16m of stock. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.
General Public Ownership
With a 37% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Meridian Energy. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Meridian Energy better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Meridian Energy you should be aware of, and 1 of them is a bit concerning.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company .
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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.
