Could Dimerix Limited’s (ASX:DXB) Investor Composition Influence The Stock Price?

If you want to know who really controls Dimerix Limited (ASX:DXB), 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. 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.

Dimerix is a smaller company with a market capitalization of AU$14m, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions don’t own many shares in the company. Let’s delve deeper into each type of owner, to discover more about DXB.

View our latest analysis for Dimerix

ASX:DXB Ownership Summary December 17th 18
ASX:DXB Ownership Summary December 17th 18

What Does The Lack Of Institutional Ownership Tell Us About Dimerix?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it’s unusual to see larger companies without any institutional investors.

There are multiple explanations for why institutions don’t own a stock. The most common is that the company is too small relative to fund under management, so the institition does not bother to look closely at the company. It is also possible that fund managers don’t own the stock because they aren’t convinced it will perform well. Dimerix might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

ASX:DXB Income Statement Export December 17th 18
ASX:DXB Income Statement Export December 17th 18

We note that hedge funds don’t have a meaningful investment in Dimerix. We’re not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Dimerix

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems insiders own a significant proportion of Dimerix Limited. It has a market capitalization of just AU$14m, and insiders have AU$3.4m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public — mostly retail investors — own 63% of Dimerix . With this size of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to decline an acquisition or merger that may not improve profitability.

Private Company Ownership

We can see that Private Companies own 12%, 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.

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.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.