Stock Analysis

Could The Urban Logistics REIT plc (LON:SHED) Ownership Structure Tell Us Something Useful?

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LSE:SHED
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Every investor in Urban Logistics REIT plc (LON:SHED) should be aware of the most powerful shareholder groups. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Companies that have been privatized tend to have low insider ownership.

Urban Logistics REIT is not a large company by global standards. It has a market capitalization of UK£379m, which means it wouldn't have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about Urban Logistics REIT.

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ownership-breakdown
AIM:SHED Ownership Breakdown February 9th 2021

What Does The Institutional Ownership Tell Us About Urban Logistics REIT?

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.

We can see that Urban Logistics REIT does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Urban Logistics REIT's historic earnings and revenue below, but keep in mind there's always more to the story.

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AIM:SHED Earnings and Revenue Growth February 9th 2021

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don't have a meaningful investment in Urban Logistics REIT. Rathbone Investment Management Limited is currently the company's largest shareholder with 4.9% of shares outstanding. With 4.5% and 3.0% of the shares outstanding respectively, Franklin Resources, Inc. and Legal & General Investment Management Limited are the second and third largest shareholders.

A closer look at our ownership figures suggests that the top 24 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Urban Logistics REIT

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 Urban Logistics REIT plc. However, it's possible that insiders might have an indirect interest through a more complex structure. It seems the board members have no more than UK£2.5m worth of shares in the UK£379m company. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public holds a 31% stake in Urban Logistics REIT. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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. For example, we've discovered 5 warning signs for Urban Logistics REIT (2 are concerning!) that you should be aware of before investing here.

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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