Painful week for retail investors invested in Aristocrat Leisure Limited (ASX:ALL) after 3.2% drop, institutions also suffered losses

Key Insights

• The considerable ownership by retail investors in Aristocrat Leisure indicates that they collectively have a greater say in management and business strategy
• 48% of the business is held by the top 25 shareholders
• Recent sales by insiders

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Every investor in Aristocrat Leisure Limited (ASX:ALL) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion's share in the company with 44% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 3.2% decrease in the stock price last week, retail investors suffered the most losses, but institutions who own 44% stock also took a hit.

Let's delve deeper into each type of owner of Aristocrat Leisure, beginning with the chart below.

View our latest analysis for Aristocrat Leisure

What Does The Institutional Ownership Tell Us About Aristocrat Leisure?

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 have a fair amount of stake in Aristocrat Leisure. 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. 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 Aristocrat Leisure's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Aristocrat Leisure. Our data shows that Australian Super Pty Ltd is the largest shareholder with 7.2% of shares outstanding. In comparison, the second and third largest shareholders hold about 7.1% and 6.5% of the stock.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Aristocrat Leisure

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our information suggests that Aristocrat Leisure Limited insiders own under 1% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own AU$49m worth of shares. Arguably recent buying and selling is just as important to consider. 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 44% stake in Aristocrat Leisure. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 11%, of the Aristocrat Leisure stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Aristocrat Leisure better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Aristocrat Leisure .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.