Propel Funeral Partners Limited's (ASX:PFP) largest shareholders are retail investors with 58% ownership, private companies own 18%
Simply Wall St
5 min read
Key Insights
Significant control over Propel Funeral Partners by retail investors implies that the general public has more power to influence management and governance-related decisions
To get a sense of who is truly in control of Propel Funeral Partners Limited (ASX:PFP), it is important to understand the ownership structure of the business. With 58% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Meanwhile, private companies make up 18% of the company’s shareholders.
Let's delve deeper into each type of owner of Propel Funeral Partners, beginning with the chart below.
What Does The Institutional Ownership Tell Us About Propel Funeral Partners?
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 Propel Funeral Partners 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 Propel Funeral Partners' historic earnings and revenue below, but keep in mind there's always more to the story.
ASX:PFP Earnings and Revenue Growth September 16th 2023
We note that hedge funds don't have a meaningful investment in Propel Funeral Partners. Looking at our data, we can see that the largest shareholder is DKH Ti Pty Ltd with 12% of shares outstanding. For context, the second largest shareholder holds about 7.6% of the shares outstanding, followed by an ownership of 2.9% by the third-largest shareholder. Peter Dowding, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Furthermore, CEO Albin Kurti is the owner of 2.4% of the company's shares.
Our studies suggest that the top 23 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Propel Funeral Partners
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our most recent data indicates that insiders own a reasonable proportion of Propel Funeral Partners Limited. Insiders have a AU$55m stake in this AU$531m business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.
General Public Ownership
The general public, who are usually individual investors, hold a substantial 58% stake in Propel Funeral Partners, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.
Private Equity Ownership
With an ownership of 7.6%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
Private Company Ownership
We can see that Private Companies own 18%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Propel Funeral Partners better, we need to consider many other factors. Take risks for example - Propel Funeral Partners has 1 warning sign we think you should be aware of.
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.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
