What Kind Of Shareholder Appears On The Digital Wine Ventures Limited's (ASX:DW8) Shareholder Register?

If you want to know who really controls Digital Wine Ventures Limited (ASX:DW8), then you'll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

Digital Wine Ventures is a smaller company with a market capitalization of AU$6.9m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it's seems that institutions are noticeable on the share registry. Let's take a closer look to see what the different types of shareholder can tell us about Digital Wine Ventures.

View 6 warning signs we detected for Digital Wine Ventures

What Does The Institutional Ownership Tell Us About Digital Wine Ventures?

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.

Digital Wine Ventures already has institutions on the share registry. Indeed, they own 7.9% of 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 Digital Wine Ventures's historic earnings and revenue, below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Digital Wine Ventures. Looking at our data, we can see that the largest shareholder is the CEO Dean Taylor with 7.4% of shares outstanding. Next, we have Cranley Consulting Pty Ltd, Asset Management Arm and Merchant Funds Management Pty Ltd as the second and third largest shareholders, holding 3.3% and 3.0%, of the shares outstanding, respectively.

A deeper look at our ownership data shows that the top 24 shareholders collectively hold less than 50% of the register, suggesting a large group of small holders where no one share holder has a majority.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Digital Wine Ventures

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 information suggests that insiders maintain a significant holding in Digital Wine Ventures Limited. Insiders have a AU$1.6m stake in this AU$6.9m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public -- mostly retail investors -- own 64% of Digital Wine Ventures. With this size of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to decline an acquisition or merger that may not improve profitability.

Private Company Ownership

We can see that Private Companies own 4.6%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Digital Wine Ventures better, we need to consider many other factors.

For example, we've discovered 6 warning signs for Digital Wine Ventures (of which 4 are major) which any shareholder or potential investor should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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.

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. Thank you for reading.