Retail investors who hold 59% of Audinate Group Limited (ASX:AD8) gained 16%, institutions profited as well

Key Insights

• The considerable ownership by retail investors in Audinate Group indicates that they collectively have a greater say in management and business strategy
• The top 25 shareholders own 40% of the company
• Institutional ownership in Audinate Group is 26%

A look at the shareholders of Audinate Group Limited (ASX:AD8) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are retail investors with 59% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 16% increase in the stock price last week, retail investors profited the most, but institutions who own 26% stock also stood to gain from the increase.

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

Check out our latest analysis for Audinate Group

What Does The Institutional Ownership Tell Us About Audinate Group?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Audinate 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. 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 Audinate Group's historic earnings and revenue below, but keep in mind there's always more to the story.

Audinate Group is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Australian Super Pty Ltd with 7.8% of shares outstanding. With 7.6% and 4.6% of the shares outstanding respectively, Yamaha Corporation and State Street Global Advisors, Inc. are the second and third largest shareholders. Additionally, the company's CEO Aidan Williams directly holds 2.3% of the total shares outstanding.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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 Audinate 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.

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.

Shareholders would probably be interested to learn that insiders own shares in Audinate Group Limited. As individuals, the insiders collectively own AU$44m worth of the AU$872m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 59% stake in Audinate Group, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Public Company Ownership

Public companies currently own 7.6% of Audinate Group stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Audinate Group , and understanding them should be part of your investment process.

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.