To get a sense of who is truly in control of Arena REIT (ASX:ARF), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 51% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Meanwhile, institutions make up 48% of the company’s shareholders. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.
In the chart below, we zoom in on the different ownership groups of Arena REIT.
Check out our latest analysis for Arena REIT
What Does The Institutional Ownership Tell Us About Arena REIT?
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 Arena REIT 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. 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 Arena REIT's historic earnings and revenue below, but keep in mind there's always more to the story.
Arena REIT is not owned by hedge funds. Our data shows that The Vanguard Group, Inc. is the largest shareholder with 7.6% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.7% and 5.6% of the stock.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
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 Arena 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.