Is Granite Real Estate Investment Trust (TSE:GRT.UN) Popular Amongst Institutions?

By
Simply Wall St
Published
May 31, 2021
TSX:GRT.UN
Source: Shutterstock

A look at the shareholders of Granite Real Estate Investment Trust (TSE:GRT.UN) can tell us which group is most powerful. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Companies that have been privatized tend to have low insider ownership.

Granite Real Estate Investment Trust has a market capitalization of CA$5.0b, so it's too big to fly under the radar. We'd expect to see both institutions and retail investors owning a portion of the company. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about Granite Real Estate Investment Trust.

View our latest analysis for Granite Real Estate Investment Trust

ownership-breakdown
TSX:GRT.UN Ownership Breakdown June 1st 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.

As you can see, institutional investors have a fair amount of stake in Granite Real Estate Investment Trust. 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 June 1st 2021

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Hedge funds don't have many shares in Granite Real Estate Investment Trust. The company's largest shareholder is Connor, Clark & Lunn Investment Management Ltd., with ownership of 5.4%. Meanwhile, the second and third largest shareholders, hold 5.0% and 4.6%, of the shares outstanding, respectively.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Granite Real Estate Investment Trust

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

Our information suggests that Granite Real Estate Investment Trust insiders own under 1% of the company. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around CA$11m worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

With a 34% ownership, the general public have some degree of sway over Granite Real Estate Investment Trust. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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. Be aware that Granite Real Estate Investment Trust is showing 3 warning signs in our investment analysis , and 1 of those can't be ignored...

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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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