Institutions' substantial holdings in Aura Energy implies that they have significant influence over the company's share price
51% of the business is held by the top 9 shareholders
Every investor in Aura Energy Limited (ASX:AEE) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 38% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
And as as result, institutional investors reaped the most rewards after the company's stock price gained 11% last week. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 11%.
In the chart below, we zoom in on the different ownership groups of Aura Energy.
What Does The Institutional Ownership Tell Us About Aura Energy?
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 Aura Energy does have institutional investors; and they hold a good portion of the company's stock. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Aura Energy, (below). Of course, keep in mind that there are other factors to consider, too.
We note that hedge funds don't have a meaningful investment in Aura Energy. Macquarie Group, Ltd., Banking & Securities Investments is currently the company's largest shareholder with 12% of shares outstanding. Asean Investment Management is the second largest shareholder owning 10% of common stock, and Computershare Clearing Pty Ltd, Asset Management Arm holds about 6.4% of the company stock. In addition, we found that David Woodall, the CEO has 2.6% of the shares allocated to their name.
We did some more digging and found that 9 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.
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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of Aura Energy
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.
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 most recent data indicates that insiders own a reasonable proportion of Aura Energy Limited. Insiders have a AU$38m stake in this AU$157m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 36% stake in Aura Energy. 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.
It's always worth thinking about the different groups who own shares in a company. But to understand Aura Energy better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Aura Energy you should be aware of, and 2 of them are significant.
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.
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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.