With 64% ownership, insiders at Dicker Data Limited (ASX:DDR) are pretty optimistic and have been buying recently
Key Insights
Significant insider control over Dicker Data implies vested interests in company growth
The top 2 shareholders own 63% of the company
A look at the shareholders of Dicker Data Limited (ASX:DDR) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 64% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Notably, insiders have bought shares recently. This could signal that stock prices could go up and insiders are here for it.
Let's delve deeper into each type of owner of Dicker Data, beginning with the chart below.
See our latest analysis for Dicker Data
What Does The Institutional Ownership Tell Us About Dicker Data?
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.
Less than 5% of Dicker Data is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.
Hedge funds don't have many shares in Dicker Data. The company's CEO David Dicker is the largest shareholder with 32% of shares outstanding. With 31% and 1.5% of the shares outstanding respectively, Fiona Brown and The Vanguard Group, Inc. are the second and third largest shareholders. Interestingly, the second-largest shareholder, Fiona Brown is also Top Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.
A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 63% stake.
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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Dicker Data
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
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.
It seems that insiders own more than half the Dicker Data Limited stock. This gives them a lot of power. Given it has a market cap of AU$1.5b, that means insiders have a whopping AU$956m worth of shares in their own names. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.
General Public Ownership
With a 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Dicker Data. 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:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 3 warning signs we've spotted with Dicker Data (including 2 which are a bit unpleasant) .
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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