Yahoo Finance While institutions own 34% of Australian Finance Group Limited (ASX:AFG), individual investors are its largest shareholders with 36% ownership
If you want to know who really controls Australian Finance Group Limited (ASX:AFG), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual investors with 36% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Meanwhile, institutions make up 34% of the company’s shareholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.
Let's take a closer look to see what the different types of shareholders can tell us about Australian Finance Group.
View our latest analysis for Australian Finance Group
What Does The Institutional Ownership Tell Us About Australian Finance Group?
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 Australian Finance Group does have institutional investors; and they hold a good portion of the company's 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. 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 Australian Finance Group, (below). Of course, keep in mind that there are other factors to consider, too.
Australian Finance Group is not owned by hedge funds. Challenger Limited is currently the company's largest shareholder with 6.2% of shares outstanding. For context, the second largest shareholder holds about 6.1% of the shares outstanding, followed by an ownership of 6.0% by the third-largest shareholder. Note that the second and third-largest shareholders are also Top Key Executive and Member of the Board of Directors, respectively, meaning that the company's top shareholders are insiders. In addition, we found that David Bailey, the CEO has 0.6% of the shares allocated to their name.
On further inspection, we found that more than half the company's shares are owned by the top 10 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
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 Australian Finance Group
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. 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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our most recent data indicates that insiders own a reasonable proportion of Australian Finance Group Limited. It has a market capitalization of just AU$435m, and insiders have AU$105m worth of shares in their own names. 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 Australian Finance Group. 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.
Private Company Ownership
It seems that Private Companies own 5.4%, of the Australian Finance Group stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Australian Finance Group better, we need to consider many other factors. Be aware that Australian Finance Group is showing 3 warning signs in our investment analysis , you should know about...
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.
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.
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