Individual investors account for 50% of Dexus Convenience Retail REIT's (ASX:DXC) ownership, while institutions account for 34%
A look at the shareholders of Dexus Convenience Retail REIT (ASX:DXC) can tell us which group is most powerful. The group holding the most number of shares in the company, around 50% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).
Meanwhile, institutions make up 34% of the company’s shareholders. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time.
Let's delve deeper into each type of owner of Dexus Convenience Retail REIT, beginning with the chart below.
View our latest analysis for Dexus Convenience Retail REIT
What Does The Institutional Ownership Tell Us About Dexus Convenience Retail REIT?
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.
As you can see, institutional investors have a fair amount of stake in Dexus Convenience Retail REIT. 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 Dexus Convenience Retail REIT's historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Dexus Convenience Retail REIT. Our data shows that APN Funds Management Ltd. is the largest shareholder with 8.0% of shares outstanding. The second and third largest shareholders are APN Property Group Limited and Perpetual Corporate Trust, with an equal amount of shares to their name at 7.3%.
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.
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 Dexus Convenience Retail REIT
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
We can report that insiders do own shares in Dexus Convenience Retail REIT. As individuals, the insiders collectively own AU$17m worth of the AU$380m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.
General Public Ownership
The general public, who are usually individual investors, hold a 50% stake in Dexus Convenience Retail REIT. 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.
Private Company Ownership
It seems that Private Companies own 12%, of the Dexus Convenience Retail REIT stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Dexus Convenience Retail REIT better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Dexus Convenience Retail REIT (of which 1 doesn't sit too well with us!) you should know about.
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.
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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.
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