Could the ownership structure of Investor Property Limited (NZSE: IPL) tell us anything useful?



Every investor in Investore Property Limited (NZSE: IPL) should know about the most powerful shareholder groups. Insiders often own a large portion of younger and smaller companies, while larger companies tend to have institutions as shareholders. We also tend to see a decrease in insider ownership in companies that were previously owned by the public sector.

Investore Property is a small company with a market cap of NZ $ 736 million, so it may still go under the radar of many institutional investors. Looking at our data on ownership groups (below), it appears that institutions own shares in the company. We can zoom in on the different property groups, to find out more about Investor Property.

See our latest analysis for Investor Property

NZSE: Distribution of IPL property May 30, 2021

What does institutional ownership tell us about investor ownership?

Institutional investors generally compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.

As you can see, Institutional Investors have a significant stake in Investor Property. This implies that analysts working for these institutions have reviewed the title and appreciate it. But like everyone else, they could be wrong. When several institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes awry, several parties may compete with each other to sell stocks quickly. This risk is higher in a company with no history of growth. You can see Investor Property’s historical earnings and income below, but keep in mind that there is always more to tell.

profit and revenue growth
NZSE: IPL Profits and Revenue Growth May 30, 2021

Since institutional investors own more than half of the issued shares, the board will likely need to pay attention to their preferences. Investor Property is not owned by hedge funds. Stride Stapled Group is currently the largest shareholder, with 19% of the shares outstanding. In comparison, the second and third shareholders hold around 8.5% and 8.1% of the capital.

Upon closer inspection, we found that more than half of the company’s stock is owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are to some extent offset by the smaller ones.

Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be achieved by studying the feelings of analysts. Many analysts cover the stock, so it can be interesting to see what they are forecasting as well.

Insider ownership of investor ownership

The definition of an insider may differ slightly from country to country, but board members still count. The management of the company manages the company, but the CEO will report to the board of directors, even if he is a member of the board.

Insider ownership is positive when it indicates that executives think like the real owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.

Our information suggests that Investore Property Limited insiders own less than 1% of the company. It has a market capitalization of just NZ $ 736 million and the board of directors only holds NZ $ 377,000 of shares in their own name. Many small business investors prefer to see the board of directors more heavily invested. You can click here to see if these insiders have bought or sold.

General public property

With 44% ownership, the general public has some influence over Investor Property. While this property size may not be enough to influence a policy decision in their favor, they can still have a collective impact on company policies.

Next steps:

While it is worth considering the different groups that own a business, there are other factors that are even more important. For example, we have identified 3 warning signs for Investor Property (1 cannot be ignored) that you should be aware of.

If you’d rather find out what analysts are forecasting in terms of future growth, don’t miss this free analyst forecast report.

NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of the date of the financial declaration. This may not be consistent with the figures in the annual reports.

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