Eagers Automotive Limited's (ASX:APE) largest shareholders are retail investors with 48% ownership, private companies own 31%

Key Insights

• The considerable ownership by retail investors in Eagers Automotive indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 21 shareholders
• Institutional ownership in Eagers Automotive is 14%

To get a sense of who is truly in control of Eagers Automotive Limited (ASX:APE), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 48% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Meanwhile, private companies make up 31% of the company’s shareholders.

Let's delve deeper into each type of owner of Eagers Automotive, beginning with the chart below.

See our latest analysis for Eagers Automotive

What Does The Institutional Ownership Tell Us About Eagers Automotive?

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.

Eagers Automotive already has institutions on the share registry. Indeed, they own a respectable stake in 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. 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 Eagers Automotive's historic earnings and revenue below, but keep in mind there's always more to the story.

Eagers Automotive is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is WFM Motors Pty Ltd with 27% of shares outstanding. The Vanguard Group, Inc. is the second largest shareholder owning 4.3% of common stock, and Argo Investments Limited holds about 2.5% of the company stock.

After doing some more digging, we found that the top 21 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Eagers Automotive

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.

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.

We can see that insiders own shares in Eagers Automotive Limited. This is a big company, so it is good to see this level of alignment. Insiders own AU$94m worth of shares (at current prices). If you would like to explore the question of insider alignment, 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 48% stake in Eagers Automotive. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 31%, of the company's shares. 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.

Public Company Ownership

It appears to us that public companies own 3.2% of Eagers Automotive. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Eagers Automotive you should be aware of, and 1 of them can't be ignored.

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.

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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.