Platinum Investment Management Limited (ASX:PTM) most popular amongst retail investors who own 47%, insiders hold 28%
Key Insights
Platinum Investment Management's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
A total of 16 investors have a majority stake in the company with 50% ownership
To get a sense of who is truly in control of Platinum Investment Management Limited (ASX:PTM), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 47% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Meanwhile, individual insiders make up 28% of the company’s shareholders. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.
In the chart below, we zoom in on the different ownership groups of Platinum Investment Management.
Check out our latest analysis for Platinum Investment Management
What Does The Institutional Ownership Tell Us About Platinum Investment Management?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
As you can see, institutional investors have a fair amount of stake in Platinum Investment Management. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Platinum Investment Management's earnings history below. Of course, the future is what really matters.
Our data indicates that hedge funds own 5.1% of Platinum Investment Management. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Our data suggests that William Kerr Neilson, who is also the company's Top Key Executive, holds the most number of shares at 22%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. Andrew Clifford is the second largest shareholder owning 5.7% of common stock, and Regal Partners Limited holds about 5.1% of the company stock. Interestingly, the second-largest shareholder, Andrew Clifford is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.
After doing some more digging, we found that the top 16 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Platinum Investment Management
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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 information suggests that insiders maintain a significant holding in Platinum Investment Management Limited. Insiders own AU$208m worth of shares in the AU$745m company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 47% stake in the company, and hence can't easily be ignored. 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. Be aware that Platinum Investment Management is showing 2 warning signs in our investment analysis , 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.
