Institutions along with individual investors who hold considerable shares inCharter Hall Long WALE REIT (ASX:CLW) come under pressure; lose 3.1% of holdings value

Key Insights

• Significant control over Charter Hall Long WALE REIT by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 17 shareholders own 50% of the company
• 40% of Charter Hall Long WALE REIT is held by Institutions

To get a sense of who is truly in control of Charter Hall Long WALE REIT (ASX:CLW), it is important to understand the ownership structure of the business. With 45% stake, individual investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of individual investors took a hit after last week’s 3.1% price drop, institutions with their 40% holdings also suffered.

Let's delve deeper into each type of owner of Charter Hall Long WALE REIT, beginning with the chart below.

View our latest analysis for Charter Hall Long WALE REIT

What Does The Institutional Ownership Tell Us About Charter Hall Long WALE REIT?

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 Charter Hall Long WALE REIT does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Charter Hall Long WALE REIT's historic earnings and revenue below, but keep in mind there's always more to the story.

Charter Hall Long WALE REIT is not owned by hedge funds. The company's largest shareholder is Charter Hall Funds Management Ltd., with ownership of 11%. For context, the second largest shareholder holds about 11% of the shares outstanding, followed by an ownership of 8.7% by the third-largest shareholder.

A closer look at our ownership figures suggests that the top 17 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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 Charter Hall Long WALE REIT

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.

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 Charter Hall Long WALE REIT. But they may have an indirect interest through a corporate structure that we haven't picked up on. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around AU$13m worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 45% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Charter Hall Long WALE REIT. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 14%, of the Charter Hall Long WALE REIT stock. 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. Take risks for example - Charter Hall Long WALE REIT has 2 warning signs we think you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.