Great week for Growthpoint Properties Australia (ASX:GOZ) institutional investors after losing 7.2% over the previous year

Key Insights

• Significantly high institutional ownership implies Growthpoint Properties Australia's stock price is sensitive to their trading actions
• Growthpoint Properties Limited owns 64% of the company
• Insiders have been buying lately

Every investor in Growthpoint Properties Australia (ASX:GOZ) should be aware of the most powerful shareholder groups. With 72% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Institutional investors would appreciate the 4.9% increase in share price last week, given their one-year losses have totalled a disappointing 7.2%.

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

See our latest analysis for Growthpoint Properties Australia

What Does The Institutional Ownership Tell Us About Growthpoint Properties Australia?

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.

Growthpoint Properties Australia already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Growthpoint Properties Australia's historic earnings and revenue below, but keep in mind there's always more to the story.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don't have a meaningful investment in Growthpoint Properties Australia. Growthpoint Properties Limited is currently the company's largest shareholder with 64% of shares outstanding. This implies that they have majority interest control of the future of the company. The Vanguard Group, Inc. is the second largest shareholder owning 2.5% of common stock, and BlackRock, Inc. holds about 1.0% of the company stock.

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 Growthpoint Properties Australia

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. 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.

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 Growthpoint Properties Australia in their own names. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own AU$15m worth of shares. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 26% stake in Growthpoint Properties Australia. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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. To that end, you should learn about the 2 warning signs we've spotted with Growthpoint Properties Australia (including 1 which makes us a bit uncomfortable) .

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com