Yahoo Finance Retail investors account for 54% of Perpetual Limited's (ASX:PPT) ownership, while institutions account for 40%
Key Insights
Significant control over Perpetual by retail investors implies that the general public has more power to influence management and governance-related decisions
43% of the business is held by the top 25 shareholders
To get a sense of who is truly in control of Perpetual Limited (ASX:PPT), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 54% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).
And institutions on the other hand have a 40% ownership in the company. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.
Let's delve deeper into each type of owner of Perpetual, beginning with the chart below.
See our latest analysis for Perpetual
What Does The Institutional Ownership Tell Us About Perpetual?
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.
Perpetual already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Perpetual, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don't have many shares in Perpetual. Looking at our data, we can see that the largest shareholder is BlackRock, Inc. with 7.4% of shares outstanding. State Street Global Advisors, Inc. is the second largest shareholder owning 6.1% of common stock, and JPMorgan Chase & Co, Brokerage and Securities Investments holds about 3.5% of the company stock.
Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Perpetual
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.
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.
We can see that insiders own shares in Perpetual Limited. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around AU$23m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a substantial 54% stake in Perpetual, 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.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - Perpetual has 3 warning signs (and 2 which shouldn't be ignored) we think 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.
