Do Institutions Own Inghams Group Limited (ASX:ING) Shares?

By
Simply Wall St
Published
March 20, 2021
ASX:ING
Source: Shutterstock

If you want to know who really controls Inghams Group Limited (ASX:ING), then you'll have to look at the makeup of its share registry. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. We also tend to see lower insider ownership in companies that were previously publicly owned.

Inghams Group has a market capitalization of AU$1.3b, so we would expect some institutional investors to have noticed the stock. In the chart below, we can see that institutions are noticeable on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about Inghams Group.

View our latest analysis for Inghams Group

ownership-breakdown
ASX:ING Ownership Breakdown March 21st 2021

What Does The Institutional Ownership Tell Us About Inghams Group?

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.

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

earnings-and-revenue-growth
ASX:ING Earnings and Revenue Growth March 21st 2021

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Inghams Group is not owned by hedge funds. The company's largest shareholder is AustralianSuper Pty. Ltd., with ownership of 9.8%. For context, the second largest shareholder holds about 9.0% of the shares outstanding, followed by an ownership of 7.9% by the third-largest shareholder.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Inghams Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 data suggests that insiders own under 1% of Inghams Group Limited in their own names. It seems the board members have no more than AU$5.2m worth of shares in the AU$1.3b company. I generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, with a 22% stake in the company, will not easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Inghams Group better, we need to consider many other factors. Be aware that Inghams Group is showing 3 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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. 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.
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