With 44% ownership in Lighthouse Properties p.l.c. (JSE:LTE), institutional investors have a lot riding on the business

Key Insights

• Significantly high institutional ownership implies Lighthouse Properties' stock price is sensitive to their trading actions
• A total of 3 investors have a majority stake in the company with 57% ownership
• Recent purchases by insiders

Every investor in Lighthouse Properties p.l.c. (JSE:LTE) should be aware of the most powerful shareholder groups. With 44% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Last week’s 7.4% gain means that institutional investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. The one-year return on investment is currently 16% and last week's gain would have been more than welcomed.

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

Check out our latest analysis for Lighthouse Properties

What Does The Institutional Ownership Tell Us About Lighthouse Properties?

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 Lighthouse Properties 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Lighthouse Properties, (below). Of course, keep in mind that there are other factors to consider, too.

Lighthouse Properties is not owned by hedge funds. Our data shows that Resilient REIT Limited is the largest shareholder with 31% of shares outstanding. Desmond de Beer is the second largest shareholder owning 19% of common stock, and Public Investment Corporation Limited holds about 7.7% of the company stock.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Lighthouse Properties

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 a reasonable proportion of Lighthouse Properties p.l.c.. Insiders have a R3.8b stake in this R15b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 23% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Lighthouse Properties. 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.

Private Company Ownership

Our data indicates that Private Companies hold 7.4%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Lighthouse Properties better, we need to consider many other factors. Take risks for example - Lighthouse Properties has 3 warning signs (and 2 which can't be ignored) we think you should know about.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.