What Type Of Shareholders Make Up Australian Agricultural Company Limited's (ASX:AAC) Share Registry?

By
Simply Wall St
Published
October 25, 2021
ASX:AAC
Source: Shutterstock

Every investor in Australian Agricultural Company Limited (ASX:AAC) should be aware of the most powerful shareholder groups. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

Australian Agricultural is a smaller company with a market capitalization of AU$952m, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutions own shares in the company. Let's take a closer look to see what the different types of shareholders can tell us about Australian Agricultural.

See our latest analysis for Australian Agricultural

ownership-breakdown
ASX:AAC Ownership Breakdown October 25th 2021

What Does The Institutional Ownership Tell Us About Australian Agricultural?

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.

Australian Agricultural already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Australian Agricultural, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
ASX:AAC Earnings and Revenue Growth October 25th 2021

We note that hedge funds don't have a meaningful investment in Australian Agricultural. Looking at our data, we can see that the largest shareholder is Bryan Glinton with 48% of shares outstanding. With 2.4% and 2.3% of the shares outstanding respectively, The Vanguard Group, Inc. and Brett Blundy are the second and third largest shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 50% stake.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Australian Agricultural

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. 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.

Our most recent data indicates that insiders own the majority of Australian Agricultural Company Limited. This means they can collectively make decisions for the company. Given it has a market cap of AU$952m, that means they have AU$492m worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

With a 39% ownership, the general public have some degree of sway over Australian Agricultural. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Australian Agricultural better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Australian Agricultural you should be aware of, and 1 of them can't be ignored.

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.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.