What Kind Of Shareholders Own Diversified United Investment Limited (ASX:DUI)?

The big shareholder groups in Diversified United Investment Limited (ASX:DUI) have power over the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. We also tend to see lower insider ownership in companies that were previously publicly owned.

With a market capitalization of AU$1.0b, Diversified United Investment is a decent size, so it is probably on the radar of institutional investors. In the chart below, we can see that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about Diversified United Investment.

View our latest analysis for Diversified United Investment

What Does The Institutional Ownership Tell Us About Diversified United Investment?

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.

Diversified United Investment already has institutions on the share registry. Indeed, they own a respectable stake in 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. 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 Diversified United Investment, (below). Of course, keep in mind that there are other factors to consider, too.

Diversified United Investment is not owned by hedge funds. The company's largest shareholder is Ian Potter Foundation, Endowment Arm, with ownership of 17%. For context, the second largest shareholder holds about 6.8% of the shares outstanding, followed by an ownership of 6.3% by the third-largest shareholder.

On studying our ownership data, we found that 20 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Diversified United Investment

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Diversified United Investment Limited. In their own names, insiders own AU$47m worth of stock in the AU$1.0b company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, mostly retail investors, hold a substantial 57% stake in Diversified United Investment, suggesting it is a fairly popular stock. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Diversified United Investment is showing 1 warning sign in our investment analysis , you should know about...

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.

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