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What Type Of Shareholder Owns Ascott Residence Trust’s (SGX:A68U)?

The big shareholder groups in Ascott Residence Trust (SGX:A68U) have power over the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. We also tend to see lower insider ownership in companies that were previously publicly owned.

Ascott Residence Trust isn’t enormous, but it’s not particularly small either. It has a market capitalization of S$2.5b, which means it would generally expect to see some institutions on the share registry. In the chart below below, we can see that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about A68U.

Check out our latest analysis for Ascott Residence Trust

SGX:A68U Ownership Summary, March 18th 2019
SGX:A68U Ownership Summary, March 18th 2019

What Does The Institutional Ownership Tell Us About Ascott Residence Trust?

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.

We can see that Ascott Residence Trust does have institutional investors; and they hold 15% of the stock. 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 Ascott Residence Trust’s historic earnings and revenue, below, but keep in mind there’s always more to the story.

SGX:A68U Income Statement, March 18th 2019
SGX:A68U Income Statement, March 18th 2019

We note that hedge funds don’t have a meaningful investment in Ascott Residence Trust. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Ascott Residence Trust

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.

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.

Our data suggests that insiders own under 1% of Ascott Residence Trust in their own names. However, it’s possible that insiders might have an indirect interest through a more complex structure. It’s a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own S$22m worth of shares. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public holds a 47% stake in A68U. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

We can see that public companies hold 36%, of the A68U shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.

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