Retail investors account for 60% of Insurance Australia Group Limited's (ASX:IAG) ownership, while institutions account for 36%
In This Article:
Key Insights
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The considerable ownership by retail investors in Insurance Australia Group indicates that they collectively have a greater say in management and business strategy
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The top 25 shareholders own 37% of the company
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36% of Insurance Australia Group is held by Institutions
A look at the shareholders of Insurance Australia Group Limited (ASX:IAG) can tell us which group is most powerful. The group holding the most number of shares in the company, around 60% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).
And institutions on the other hand have a 36% ownership in the company. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.
In the chart below, we zoom in on the different ownership groups of Insurance Australia Group.
View our latest analysis for Insurance Australia Group
What Does The Institutional Ownership Tell Us About Insurance Australia Group?
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.
Insurance Australia Group 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 Insurance Australia Group's earnings history below. Of course, the future is what really matters.
Insurance Australia Group is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is State Street Global Advisors, Inc. with 7.1% of shares outstanding. For context, the second largest shareholder holds about 5.9% of the shares outstanding, followed by an ownership of 5.2% by the third-largest shareholder.
Our studies suggest that the top 25 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.
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.