Deep Yellow Limited's (ASX:DYL) top owners are retail investors with 60% stake, while 26% is held by institutions
Key Insights
Significant control over Deep Yellow by retail investors implies that the general public has more power to influence management and governance-related decisions
A total of 25 investors have a majority stake in the company with 40% ownership
If you want to know who really controls Deep Yellow Limited (ASX:DYL), 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 60% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Institutions, on the other hand, account for 26% of the company's stockholders. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones.
Let's delve deeper into each type of owner of Deep Yellow, beginning with the chart below.
See our latest analysis for Deep Yellow
What Does The Institutional Ownership Tell Us About Deep Yellow?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
Deep Yellow 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Deep Yellow's earnings history below. Of course, the future is what really matters.
Deep Yellow is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Paradice Investment Management Pty Ltd. with 8.0% of shares outstanding. For context, the second largest shareholder holds about 6.9% of the shares outstanding, followed by an ownership of 5.3% by the third-largest shareholder. Additionally, the company's CEO John Borshoff directly holds 2.0% of the total shares outstanding.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Deep Yellow
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Shareholders would probably be interested to learn that insiders own shares in Deep Yellow Limited. As individuals, the insiders collectively own AU$66m worth of the AU$766m company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public -- including retail investors -- own 60% of Deep Yellow. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.
Private Company Ownership
It seems that Private Companies own 5.3%, of the Deep Yellow stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Deep Yellow better, we need to consider many other factors. For instance, we've identified 6 warning signs for Deep Yellow (3 don't sit too well with us) that you should be aware of.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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.
