In This Article:
Key Insights
-
Institutions' substantial holdings in LondonMetric Property implies that they have significant influence over the company's share price
-
A total of 25 investors have a majority stake in the company with 50% ownership
Every investor in LondonMetric Property Plc (LON:LMP) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 78% to be precise, is institutions. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
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. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.
Let's take a closer look to see what the different types of shareholders can tell us about LondonMetric Property.
View our latest analysis for LondonMetric Property
What Does The Institutional Ownership Tell Us About LondonMetric Property?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
As you can see, institutional investors have a fair amount of stake in LondonMetric Property. 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 LondonMetric Property's historic earnings and revenue below, but keep in mind there's always more to the story.
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. LondonMetric Property is not owned by hedge funds. Our data shows that Norges Bank Investment Management is the largest shareholder with 5.7% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.0% and 3.4% of the stock.
Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 25 shareholders, meaning that no single shareholder has a majority interest in the ownership.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.