What Kind Of Investors Own Most Of Charter Hall Long WALE REIT (ASX:CLW)?

Simply Wall St

Mon, Jul 6, 2020, 10:43 PM 5 min read

Every investor in Charter Hall Long WALE REIT (ASX:CLW) should be aware of the most powerful shareholder groups. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that used to be publicly owned tend to have lower insider ownership.

Charter Hall Long WALE REIT isn't enormous, but it's not particularly small either. It has a market capitalization of AU$2.2b, which means it would generally expect to see some institutions on the share registry. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholder can tell us about Charter Hall Long WALE REIT.

See our latest analysis for Charter Hall Long WALE REIT

ASX:CLW Ownership Breakdown July 7th 2020

What Does The Institutional Ownership Tell Us About Charter Hall Long WALE 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 Charter Hall Long WALE REIT 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 Charter Hall Long WALE REIT's earnings history, below. Of course, the future is what really matters.

ASX:CLW Earnings and Revenue Growth July 7th 2020

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. We note that hedge funds don't have a meaningful investment in Charter Hall Long WALE REIT. The company's largest shareholder is Charter Hall Funds Management Ltd., with ownership of 11%. The Vanguard Group, Inc. is the second largest shareholder owning 6.9% of common stock, and BlackRock, Inc. holds about 5.2% of the company stock.

After doing some more digging, we found that the top 24 have the combined ownership of 50% in the company, suggesting that no one share holder has significant control over the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Charter Hall Long WALE REIT

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our data suggests that insiders own under 1% of Charter Hall Long WALE REIT in their own names. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own AU$4.4m worth of shares. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

With a 46% ownership, the general public have some degree of sway over CLW. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Charter Hall Long WALE REIT better, we need to consider many other factors. For example, we've discovered 3 warning signs for Charter Hall Long WALE REIT (1 is potentially serious!) that you should be aware of before investing here.

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.

This article by Simply Wall St is general in nature. 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.

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