With 74% institutional ownership, Growthpoint Properties Australia (ASX:GOZ) is a favorite amongst the big guns

editorial-team@simplywallst.com (Simply Wall St)

Sun, Nov 17, 2024, 4:42 PM 4 min read

Significantly high institutional ownership implies Growthpoint Properties Australia's stock price is sensitive to their trading actions
64% of the company is held by a single shareholder (Growthpoint Properties Limited)
Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

To get a sense of who is truly in control of Growthpoint Properties Australia (ASX:GOZ), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are institutions with 74% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.

In the chart below, we zoom in on the different ownership groups of Growthpoint Properties Australia.

Check out our latest analysis for Growthpoint Properties Australia

ownership-breakdown — ASX:GOZ Ownership Breakdown November 17th 2024

What Does The Institutional Ownership Tell Us About Growthpoint Properties Australia?

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 Growthpoint Properties Australia. 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 Growthpoint Properties Australia's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth — ASX:GOZ Earnings and Revenue Growth November 17th 2024

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Growthpoint Properties Australia is not owned by hedge funds. Growthpoint Properties Limited is currently the company's largest shareholder with 64% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. For context, the second largest shareholder holds about 3.5% of the shares outstanding, followed by an ownership of 1.5% by the third-largest shareholder.

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. 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 Growthpoint Properties Australia

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 Growthpoint Properties Australia. 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 AU$15m 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

The general public-- including retail investors -- own 24% stake in the company, and hence can't easily be ignored. 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. For example, we've discovered 2 warning signs for Growthpoint Properties Australia (1 is significant!) 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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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.