key insights
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Significantly high institutional ownership means Australian United Investments' share price is sensitive to its trading actions.
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53% of the business is owned by the top 3 shareholders
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A company's past performance data, combined with ownership research, allows you to better assess a company's future performance.
Every investor in Australian United Investment Company Limited (ASX:AUI) should be aware of the most powerful shareholder groups. The group that owns the most shares in the company (about 48% to be exact) is institutional investors. In other words, this group faces the greatest upside potential (or downside risk).
Because institutional investors have access to large amounts of capital, their market trends tend to be closely monitored by retail and individual investors. Therefore, having significant institutional investors invested in a company is often considered a desirable characteristic.
Let's delve deeper into each type of owner at Australian United Investments, starting from the image below.
Check out our latest analysis for Australian United Investments.
What does institutional ownership tell us about Australian United Investments?
Many institutions measure performance based on indicators that approximate local markets. So they usually pay more attention to companies that are included in major indices.
We can see that Australian United Investments does have institutional investors. And they own a significant portion of the company's stock. This implies the analysts working for these institutions have considered the stock and they like it. But just like anyone else, they can be wrong. If multiple financial institutions change their view on a stock at the same time, you could see the stock price drop fast. It is therefore worth checking Australian United Investment's earnings history, below. Of course, what really matters is the future.
Hedge funds don't have many shares in Australian United Investments. The company's largest shareholder is the Ian Potter Foundation, an endowment arm with 39% ownership. By comparison, the second and third largest shareholders hold about 8.5% of the stock and his own 5.4%.
Upon further investigation, we found that the top 3 shareholders together control more than half of the company's shares, suggesting that they have significant power to influence the company's decisions.
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. Based on our information, there aren't any analyst coverage of this stock, so it's probably little known.
Australian United Investments Insider Ownership
The precise definition of an insider can be subjective, but almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be members of the board of directors. This is especially true if the manager is the founder or CEO.
Most consider insider ownership a positive, because it can indicate the board is well aligned with other shareholders. However, in some cases, too much power may be concentrated within this group.
Shareholders would probably be interested to know that insiders own shares in Australian United Investment Company Limited. It has a market capitalization of just AU$1.3b, but insiders have AU$40m worth of shares in their own names. This shows at least some consistency. You can click here to see if insiders have been buying or selling.
Open to the public
The general public, including retail investors, owns 40% of the company's shares, so they can't be easily ignored. Although this size of ownership is significant, it may not be enough to change company policy if the decision is not aligned with other large shareholders.
Private company ownership
It appears that private companies own 9.0% of Australian United Investments Ltd. It might be worth looking into this further. If insiders or other parties have an interest in these private companies, this must be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we discovered that 1 warning sign for Australian United Investments What you need to know before investing here.
of course, You may find a great investment if you look elsewhere. So take a look at this free List of interesting companies.
Note: The numbers in this article are calculated using data from the previous 12 months and refer to the 12-month period ending on the last day of the month in which the financial statements are dated. This may not match the full year annual report figures.
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This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
