Brickworks Limited (ASX:BKW) stock most popular amongst individual investors who own 48%, while public companies hold 40%

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

Sun, Apr 21, 2024, 5:23 PM 4 min read

To get a sense of who is truly in control of Brickworks Limited (ASX:BKW), it is important to understand the ownership structure of the business. With 48% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And public companies on the other hand have a 40% ownership in the company.

Let's delve deeper into each type of owner of Brickworks, beginning with the chart below.

See our latest analysis for Brickworks

ownership-breakdown — ASX:BKW Ownership Breakdown April 21st 2024

What Does The Institutional Ownership Tell Us About Brickworks?

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.

We can see that Brickworks does have institutional investors; and they hold a good portion of the company's stock. 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 Brickworks, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth — ASX:BKW Earnings and Revenue Growth April 21st 2024

Hedge funds don't have many shares in Brickworks. Looking at our data, we can see that the largest shareholder is Washington H. Soul Pattinson and Company Limited with 40% of shares outstanding. For context, the second largest shareholder holds about 2.2% of the shares outstanding, followed by an ownership of 2.0% by the third-largest shareholder.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 15 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Brickworks

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

We can report that insiders do own shares in Brickworks Limited. This is a big company, so it is good to see this level of alignment. Insiders own AU$143m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 48% stake in Brickworks. 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.

Public Company Ownership

It appears to us that public companies own 40% of Brickworks. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Brickworks you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.