In This Article:
Key Insights
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Institutions' substantial holdings in Aurizon Holdings implies that they have significant influence over the company's share price
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50% of the business is held by the top 13 shareholders
Every investor in Aurizon Holdings Limited (ASX:AZJ) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 62% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.
In the chart below, we zoom in on the different ownership groups of Aurizon Holdings.
Check out our latest analysis for Aurizon Holdings
What Does The Institutional Ownership Tell Us About Aurizon Holdings?
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.
As you can see, institutional investors have a fair amount of stake in Aurizon Holdings. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Aurizon Holdings, (below). Of course, keep in mind that there are other factors to consider, too.
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 Aurizon Holdings. The company's largest shareholder is State Street Global Advisors, Inc., with ownership of 7.5%. With 7.1% and 6.2% of the shares outstanding respectively, Mondrian Investment Partners Limited and BlackRock, Inc. are the second and third largest shareholders.
A closer look at our ownership figures suggests that the top 13 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.