Retail investors account for 60% of Data#3 Limited's (ASX:DTL) ownership, while institutions account for 30%
Key Insights
The considerable ownership by retail investors in Data#3 indicates that they collectively have a greater say in management and business strategy
37% of the business is held by the top 25 shareholders
A look at the shareholders of Data#3 Limited (ASX:DTL) can tell us which group is most powerful. The group holding the most number of shares in the company, around 60% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Institutions, on the other hand, account for 30% of the company's stockholders. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.
In the chart below, we zoom in on the different ownership groups of Data#3.
View our latest analysis for Data#3
What Does The Institutional Ownership Tell Us About Data#3?
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.
We can see that Data#3 does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Data#3's earnings history below. Of course, the future is what really matters.
Hedge funds don't have many shares in Data#3. The company's largest shareholder is State Street Global Advisors, Inc., with ownership of 5.3%. Meanwhile, the second and third largest shareholders, hold 5.0% and 3.2%, of the shares outstanding, respectively.
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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Data#3
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 most recent data indicates that insiders own some shares in Data#3 Limited. It has a market capitalization of just AU$1.1b, and insiders have AU$43m worth of shares, in their own names. 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 substantial 60% stake in Data#3, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.
Private Company Ownership
We can see that Private Companies own 6.1%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 1 warning sign for Data#3 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.