In This Article:
Key Insights
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The considerable ownership by individual investors in NEXTDC indicates that they collectively have a greater say in management and business strategy
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43% of the business is held by the top 25 shareholders
Every investor in NEXTDC Limited (ASX:NXT) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 55% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And institutions on the other hand have a 45% ownership in the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time.
In the chart below, we zoom in on the different ownership groups of NEXTDC.
Check out our latest analysis for NEXTDC
What Does The Institutional Ownership Tell Us About NEXTDC?
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.
NEXTDC already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 NEXTDC's earnings history below. Of course, the future is what really matters.
Hedge funds don't have many shares in NEXTDC. Looking at our data, we can see that the largest shareholder is State Street Global Advisors, Inc. with 6.3% of shares outstanding. Australian Super Pty Ltd is the second largest shareholder owning 5.7% of common stock, and BlackRock, Inc. holds about 5.2% of the company stock.
A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.
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 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 NEXTDC
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.