Do Institutions Own WiseTech Global Limited (ASX:WTC) Shares?

By
Simply Wall St
Published
March 17, 2022
ASX:WTC
Source: Shutterstock

The big shareholder groups in WiseTech Global Limited (ASX:WTC) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

With a market capitalization of AU$16b, WiseTech Global 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. Taking a look at our data on the ownership groups (below), it seems that institutions are noticeable on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about WiseTech Global.

View our latest analysis for WiseTech Global

ownership-breakdown
ASX:WTC Ownership Breakdown March 17th 2022

What Does The Institutional Ownership Tell Us About WiseTech Global?

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.

We can see that WiseTech Global does have institutional investors; and they hold a good portion of the company's stock. 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. 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 WiseTech Global, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
ASX:WTC Earnings and Revenue Growth March 17th 2022

We note that hedge funds don't have a meaningful investment in WiseTech Global. The company's largest shareholder is Realwise Holdings Pty Ltd, with ownership of 38%. Charles Gibbon is the second largest shareholder owning 5.3% of common stock, and Hyperion Asset Management Limited holds about 4.9% of the company stock. Furthermore, CEO Richard White is the owner of 1.2% of the company's shares.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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 WiseTech Global

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems insiders own a significant proportion of WiseTech Global Limited. It has a market capitalization of just AU$16b, and insiders have AU$1.7b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 29% ownership, the general public, mostly comprising of individual investors, have some degree of sway over WiseTech Global. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 38%, of the WiseTech Global stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 1 warning sign for WiseTech Global that you should be aware of before investing here.

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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