Could Shopping Centres Australasia Property Group’s (ASX:SCP) Investor Composition Influence The Stock Price?

Every investor in Shopping Centres Australasia Property Group (ASX:SCP) should be aware of the most powerful shareholder groups. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Companies that have been privatized tend to have low insider ownership.

Shopping Centres Australasia Property Group isn’t enormous, but it’s not particularly small either. It has a market capitalization of AU$2.5b, which means it would generally expect to see some institutions on the share registry. Taking a look at our data on the ownership groups (below), it’s seems that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about SCP.

View our latest analysis for Shopping Centres Australasia Property Group

ASX:SCP Ownership Summary, November 9th 2019
ASX:SCP Ownership Summary, November 9th 2019

What Does The Institutional Ownership Tell Us About Shopping Centres Australasia Property Group?

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.

Shopping Centres Australasia Property Group already has institutions on the share registry. Indeed, they own 44% of the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Shopping Centres Australasia Property Group, (below). Of course, keep in mind that there are other factors to consider, too.

ASX:SCP Income Statement, November 9th 2019
ASX:SCP Income Statement, November 9th 2019

Shopping Centres Australasia Property Group is not owned by hedge funds. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Shopping Centres Australasia Property Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that Shopping Centres Australasia Property Group insiders own under 1% of the company. 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$7.8m 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 55% stake in SCP, 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:

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 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.