Could The LendLease Group (ASX:LLC) Ownership Structure Tell Us Something Useful?

A look at the shareholders of LendLease Group (ASX:LLC) can tell us which group is most powerful. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Companies that used to be publicly owned tend to have lower insider ownership.

With a market capitalization of AU$6.3b, LendLease Group is rather large. We’d expect to see institutional investors on the register. Companies of this size are usually well known to retail investors, too. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about LLC.

Check out our latest analysis for LendLease Group

ASX:LLC Ownership Summary January 9th 19
ASX:LLC Ownership Summary January 9th 19

What Does The Institutional Ownership Tell Us About LendLease Group?

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 own 21% of LendLease Group. 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 LendLease Group’s earnings history, below. Of course, the future is what really matters.

ASX:LLC Income Statement Export January 9th 19
ASX:LLC Income Statement Export January 9th 19

Hedge funds don’t have many shares in LendLease Group. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of LendLease Group

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. 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.

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 LendLease Group 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$18m worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, mostly retail investors, hold a substantial 78% stake in LLC, suggesting it is a fairly popular stock. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand LendLease Group better, we need to consider many other factors.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

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.