Stock Analysis

Could The Eclipx Group Limited (ASX:ECX) Ownership Structure Tell Us Something Useful?

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ASX:ECX
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A look at the shareholders of Eclipx Group Limited (ASX:ECX) can tell us which group is most powerful. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that have been privatized tend to have low insider ownership.

Eclipx Group is a smaller company with a market capitalization of AU$657m, 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 seems that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about Eclipx Group.

Check out our latest analysis for Eclipx Group

ownership-breakdown
ASX:ECX Ownership Breakdown February 26th 2021

What Does The Institutional Ownership Tell Us About Eclipx Group?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Eclipx Group does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Eclipx Group's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
ASX:ECX Earnings and Revenue Growth February 26th 2021

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Eclipx Group is not owned by hedge funds. Yarra Funds Management Limited is currently the company's largest shareholder with 13% of shares outstanding. The second and third largest shareholders are Renaissance Smaller Companies Pty Ltd and Aware Super Pty Ltd, with an equal amount of shares to their name at 5.1%.

We also observed that the top 9 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Eclipx Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 most recent data indicates that insiders own some shares in Eclipx Group Limited. In their own names, insiders own AU$17m worth of stock in the AU$657m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 18% ownership, the general public have some degree of sway over Eclipx Group. 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 6.8%, of the Eclipx Group stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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. To that end, you should be aware of the 1 warning sign we've spotted with Eclipx Group .

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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