Can We See Significant Institutional Ownership On The Standard Life Investments Property Income Trust Limited (LON:SLI) Share Register?

The big shareholder groups in Standard Life Investments Property Income Trust Limited (LON:SLI) have power over 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. Companies that have been privatized tend to have low insider ownership.

Standard Life Investments Property Income Trust is not a large company by global standards. It has a market capitalization of UK£375m, which means it wouldn’t have the attention of many institutional investors. In the chart below, we can see that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about Standard Life Investments Property Income Trust.

View our latest analysis for Standard Life Investments Property Income Trust

LSE:SLI Ownership Summary, January 10th 2020
LSE:SLI Ownership Summary, January 10th 2020

What Does The Institutional Ownership Tell Us About Standard Life Investments Property Income Trust?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors own 55% of Standard Life Investments Property Income Trust. This suggests some credibility amongst professional investors. But we can’t rely on that fact alone, since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there’s always a risk that they are in a ‘crowded trade’. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Standard Life Investments Property Income Trust’s historic earnings and revenue, below, but keep in mind there’s always more to the story.

LSE:SLI Income Statement, January 10th 2020
LSE:SLI Income Statement, January 10th 2020

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don’t have many shares in Standard Life Investments Property Income Trust. The company’s largest shareholder is Brewin Dolphin Limited, with ownership of 11%, The second largest shareholder with 7.3%, is Hargreaves Lansdown Asset Management Limited, followed by Alliance Trust Savings Ltd., with an ownership of 6.3%.

On further inspection, we found that 52% of the share register is owned by the top 9 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. We’re not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Standard Life Investments Property Income Trust

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Standard Life Investments Property Income Trust Limited. It has a market capitalization of just UK£375m, and insiders have UK£14m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, with a 41% stake in the company, will not easily be ignored. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.

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.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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