The considerable ownership by individual investors in LondonMetric Property indicates that they collectively have a greater say in management and business strategy
31% of the business is held by the top 25 shareholders
Every investor in LondonMetric Property Plc (LON:LMP) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 50% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
While individual investors were the group that reaped the most benefits after last week’s 6.3% price gain, institutions also received a 48% cut.
Let's take a closer look to see what the different types of shareholders can tell us about LondonMetric Property.
What Does The Institutional Ownership Tell Us About LondonMetric Property?
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.
LondonMetric Property already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 LondonMetric Property's historic earnings and revenue below, but keep in mind there's always more to the story.
LSE:LMP Earnings and Revenue Growth March 9th 2024
We note that hedge funds don't have a meaningful investment in LondonMetric Property. BlackRock, Inc. is currently the largest shareholder, with 5.2% of shares outstanding. Norges Bank Investment Management is the second largest shareholder owning 3.0% of common stock, and The Vanguard Group, Inc. holds about 2.8% of the company stock.
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.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of LondonMetric Property
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
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 information suggests that LondonMetric Property Plc insiders own under 1% of the company. Keep in mind that it's a big company, and the insiders own UK£33m worth of shares. The absolute value might be more important than the proportional share. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.
General Public Ownership
With a 50% ownership, the general public, mostly comprising of individual investors, have some degree of sway over LondonMetric Property. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
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. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for LondonMetric Property (of which 2 are a bit unpleasant!) you should know about.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this freereport on analyst forecasts.
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.
