In This Article:
Key Insights
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Institutions' substantial holdings in Downer EDI implies that they have significant influence over the company's share price
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51% of the business is held by the top 7 shareholders
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Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company
To get a sense of who is truly in control of Downer EDI Limited (ASX:DOW), 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 87% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.
Let's delve deeper into each type of owner of Downer EDI, beginning with the chart below.
View our latest analysis for Downer EDI
What Does The Institutional Ownership Tell Us About Downer EDI?
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 Downer EDI. 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 Downer EDI's earnings history below. Of course, the future is what really matters.
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Downer EDI is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Ubique Asset Management Pty Ltd with 9.7% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.2% and 7.0% of the stock.
We also observed that the top 7 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.