Are Institutions Heavily Invested In Granite Real Estate Investment Trust's (TSE:GRT.UN) Shares?

By
Simply Wall St
Published
September 24, 2021
TSX:GRT.UN
Source: Shutterstock

The big shareholder groups in Granite Real Estate Investment Trust (TSE:GRT.UN) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. We also tend to see lower insider ownership in companies that were previously publicly owned.

With a market capitalization of CA$6.1b, Granite Real Estate Investment Trust 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. Our analysis of the ownership of the company, below, shows 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 Granite Real Estate Investment Trust.

See our latest analysis for Granite Real Estate Investment Trust

ownership-breakdown
TSX:GRT.UN Ownership Breakdown September 24th 2021

What Does The Institutional Ownership Tell Us About Granite Real Estate Investment Trust?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Granite Real Estate Investment Trust already has institutions on the share registry. Indeed, they own a respectable stake in 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Granite Real Estate Investment Trust's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
TSX:GRT.UN Earnings and Revenue Growth September 24th 2021

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don't have a meaningful investment in Granite Real Estate Investment Trust. The company's largest shareholder is Connor, Clark & Lunn Investment Management Ltd., with ownership of 5.3%. BMO Global Asset Management is the second largest shareholder owning 5.2% of common stock, and BlackRock, Inc. holds about 4.7% of the company stock.

A closer look at our ownership figures suggests that the top 19 shareholders have a combined ownership of 51% implying that no single shareholder 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Granite Real Estate Investment Trust

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.

Our most recent data indicates that insiders own less than 1% of Granite Real Estate Investment Trust. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own CA$13m 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, with a 28% stake in the company, will not easily be ignored. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Granite Real Estate Investment Trust better, we need to consider many other factors. For example, we've discovered 3 warning signs for Granite Real Estate Investment Trust (1 doesn't sit too well with us!) 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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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.
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