DDH1 Limited's (ASX:DDH) 14% loss last week hit both individual investors who own 37% as well as institutions

Key Insights

• DDH1's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 7 shareholders own 51% of the company
• Insiders own 20% of DDH1

To get a sense of who is truly in control of DDH1 Limited (ASX:DDH), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 37% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 14% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 36% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of DDH1.

Check out our latest analysis for DDH1

What Does The Institutional Ownership Tell Us About DDH1?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that DDH1 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at DDH1's earnings history below. Of course, the future is what really matters.

DDH1 is not owned by hedge funds. Our data shows that Brookfield Corporation is the largest shareholder with 19% of shares outstanding. In comparison, the second and third largest shareholders hold about 12% and 5.9% of the stock. Additionally, the company's CEO Sybrandt van Dyk directly holds 1.2% of the total shares outstanding.

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.

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

Insider Ownership Of DDH1

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.

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.

It seems insiders own a significant proportion of DDH1 Limited. Insiders own AU$68m worth of shares in the AU$340m company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 37% ownership, the general public, mostly comprising of individual investors, have some degree of sway over DDH1. 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.

Private Company Ownership

We can see that Private Companies own 3.7%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Public Company Ownership

We can see that public companies hold 3.5% of the DDH1 shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with DDH1 , and understanding them should be part of your investment process.

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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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.