In This Article:
Key Insights
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Significantly high institutional ownership implies G8 Education's stock price is sensitive to their trading actions
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A total of 5 investors have a majority stake in the company with 53% ownership
A look at the shareholders of G8 Education Limited (ASX:GEM) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 73% 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.
In the chart below, we zoom in on the different ownership groups of G8 Education.
Check out our latest analysis for G8 Education
What Does The Institutional Ownership Tell Us About G8 Education?
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.
We can see that G8 Education 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. 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 G8 Education'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. G8 Education is not owned by hedge funds. Our data shows that Australian Retirement Trust Pty Ltd is the largest shareholder with 16% of shares outstanding. In comparison, the second and third largest shareholders hold about 16% and 8.8% of the stock.
To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.
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.