Private companies in Adbri Limited (ASX:ABC) are its biggest bettors, and their bets paid off as stock gained 7.1% last week

Key Insights

• Significant control over Adbri by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 6 shareholders own 52% of the company
• Institutional ownership in Adbri is 18%

If you want to know who really controls Adbri Limited (ASX:ABC), then you'll have to look at the makeup of its share registry. We can see that private companies own the lion's share in the company with 43% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, private companies benefitted the most after the company's market cap rose by AU$91m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Adbri.

Check out our latest analysis for Adbri

What Does The Institutional Ownership Tell Us About Adbri?

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.

As you can see, institutional investors have a fair amount of stake in Adbri. 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 Adbri's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Adbri. Our data shows that Barro Properties Pty Ltd is the largest shareholder with 33% of shares outstanding. The second and third largest shareholders are The Vanguard Group, Inc. and Barro Group Pty Ltd., with an equal amount of shares to their name at 5.0%.

We also observed that the top 6 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.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Adbri

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own less than 1% of Adbri Limited. However, it's possible that insiders might have an indirect interest through a more complex structure. It has a market capitalization of just AU$1.4b, and the board has only AU$11m worth of shares in their own names. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 38% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Adbri. 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

Our data indicates that Private Companies hold 43%, of the company's shares. 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 Adbri better, we need to consider many other factors. Take risks for example - Adbri has 2 warning signs we think you should be aware of.

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. 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.