Gentrack Group Limited's (NZSE:GTK) market cap dropped NZ$101m last week; individual investors who hold 49% were hit as were institutions

Key Insights

• Significant control over Gentrack Group by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 21 shareholders own 50% of the company
• 43% of Gentrack Group is held by Institutions

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A look at the shareholders of Gentrack Group Limited (NZSE:GTK) can tell us which group is most powerful. The group holding the most number of shares in the company, around 49% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While institutions who own 43% came under pressure after market cap dropped to NZ$1.3b last week,individual investors took the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Gentrack Group.

Check out our latest analysis for Gentrack Group

What Does The Institutional Ownership Tell Us About Gentrack Group?

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 Gentrack Group 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. 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 Gentrack Group's earnings history below. Of course, the future is what really matters.

It looks like hedge funds own 5.7% of Gentrack Group shares. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. The company's largest shareholder is Milford Asset Management, LTD, with ownership of 9.8%. Meanwhile, the second and third largest shareholders, hold 5.7% and 4.9%, of the shares outstanding, respectively. In addition, we found that Gary Miles, the CEO has 1.6% of the shares allocated to their name.

After doing some more digging, we found that the top 21 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Gentrack Group

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.

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 some shares in Gentrack Group Limited. As individuals, the insiders collectively own NZ$25m worth of the NZ$1.3b 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

With a 49% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Gentrack Group. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

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.