Individual investors account for 52% of Incitec Pivot Limited's (ASX:IPL) ownership, while institutions account for 39%

In This Article:

Key Insights

  • Significant control over Incitec Pivot by individual investors implies that the general public has more power to influence management and governance-related decisions

  • 47% of the business is held by the top 25 shareholders

  • 39% of Incitec Pivot is held by Institutions

To get a sense of who is truly in control of Incitec Pivot Limited (ASX:IPL), it is important to understand the ownership structure of the business. We can see that individual investors own the lion's share in the company with 52% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Meanwhile, institutions make up 39% of the company’s shareholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.

In the chart below, we zoom in on the different ownership groups of Incitec Pivot.

See our latest analysis for Incitec Pivot

ownership-breakdown
ASX:IPL Ownership Breakdown March 12th 2024

What Does The Institutional Ownership Tell Us About Incitec Pivot?

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 Incitec Pivot does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Incitec Pivot's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
ASX:IPL Earnings and Revenue Growth March 12th 2024

It would appear that 8.9% of Incitec Pivot shares are controlled by hedge funds. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Our data shows that Janchor Partners Limited is the largest shareholder with 8.9% of shares outstanding. With 6.1% and 5.1% of the shares outstanding respectively, Orbis Investment Management Limited and The Vanguard Group, Inc. are the second and third largest shareholders.

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.