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Dropsuite Limited's (ASX:DSE) top owners are retail investors with 47% stake, while 30% is held by hedge funds

Key Insights

  • Dropsuite's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public

  • The top 13 shareholders own 50% of the company

  • Insiders have been selling lately

If you want to know who really controls Dropsuite Limited (ASX:DSE), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 47% 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.

Hedge funds, on the other hand, account for 30% of the company's stockholders.

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Let's take a closer look to see what the different types of shareholders can tell us about Dropsuite.

See our latest analysis for Dropsuite

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Dropsuite?

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.

Less than 5% of Dropsuite is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

earnings-and-revenue-growth
earnings-and-revenue-growth

It looks like hedge funds own 30% of Dropsuite shares. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Looking at our data, we can see that the largest shareholder is Topline Capital Management, LLC with 30% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.0% and 4.9% of the stock. Charif El-Ansari, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

After doing some more digging, we found that the top 13 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 Dropsuite

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 a reasonable proportion of Dropsuite Limited. Insiders own AU$38m worth of shares in the AU$202m company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 47% stake in Dropsuite. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Dropsuite better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Dropsuite .

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.