A look at the shareholders of Donaco International Limited (ASX:DNA) can tell us which group is most powerful. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, ‘Don’t tell me what you think, tell me what you have in your portfolio.
Donaco International is a smaller company with a market capitalization of AU$63m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it’s seems that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about Donaco International.
What Does The Institutional Ownership Tell Us About Donaco International?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it’s included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
Donaco International already has institutions on the share registry. Indeed, they own 16% of the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It’s therefore worth looking at Donaco International’s earnings history, below. Of course, the future is what really matters.
Hedge funds don’t have many shares in Donaco International. Ocp Asia (Singapore) Pte. Limited is currently the largest shareholder, with 4.8% of shares outstanding. The second largest shareholder with 4.7%, is Teck Lee Tan, followed by Bug Huy Lee, with an ownership of 4.6%.
A deeper look at our ownership data shows that the top 20 shareholders collectively hold less than 50% of the register, suggesting a large group of small holders where no one share holder has a majority.
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. As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of Donaco International
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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 information suggests that insiders maintain a significant holding in Donaco International Limited. It has a market capitalization of just AU$63m, and insiders have AU$12m worth of shares in their own names. Ownership is clearly an important issue when it comes to investment selection. But ultimately, many risks exist within the business itself, rather than its shareholders. For example, we’ve discovered 4 warning signs for Donaco International (of which 1 is major) which any shareholder or potential investor should be aware of.
General Public Ownership
The general public, mostly retail investors, hold a substantial 65% stake in DNA, suggesting it is a fairly popular stock. With this size of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to decline an acquisition or merger that may not improve profitability.
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 like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free.
If you would prefer check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, backed by strong financial data.
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 firstname.lastname@example.org. 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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