AEW UK REIT plc (LON:AEWU) is a favorite amongst institutional investors who own 56%

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

Sun, Aug 18, 2024, 2:38 AM 4 min read

Given the large stake in the stock by institutions, AEW UK REIT's stock price might be vulnerable to their trading decisions
47% of the business is held by the top 25 shareholders
Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls AEW UK REIT plc (LON:AEWU), then you'll have to look at the makeup of its share registry. With 56% stake, institutions possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

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. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.

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

Check out our latest analysis for AEW UK REIT

ownership-breakdown — LSE:AEWU Ownership Breakdown August 18th 2024

What Does The Institutional Ownership Tell Us About AEW UK REIT?

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.

AEW UK REIT already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 AEW UK REIT's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth — LSE:AEWU Earnings and Revenue Growth August 18th 2024

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Hedge funds don't have many shares in AEW UK REIT. A J Bell Holdings Limited, Asset Management Arm is currently the largest shareholder, with 6.5% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 3.9% and 3.5%, of the shares outstanding, respectively.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of AEW UK REIT

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. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our data suggests that insiders own under 1% of AEW UK REIT plc in their own names. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It has a market capitalization of just UK£150m, and the board has only UK£89k worth of shares in their own names. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

The general public, who are usually individual investors, hold a 40% stake in AEW UK REIT. 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. Case in point: We've spotted 3 warning signs for AEW UK REIT you should be aware of, and 2 of them are significant.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.