The considerable ownership by retail investors in Ridley indicates that they collectively have a greater say in management and business strategy
48% of the business is held by the top 25 shareholders
Institutions own 21% of Ridley
If you want to know who really controls Ridley Corporation Limited (ASX:RIC), then you'll have to look at the makeup of its share registry. We can see that retail investors own the lion's share in the company with 52% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
And institutions on the other hand have a 21% ownership in the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time.
Let's delve deeper into each type of owner of Ridley, beginning with the chart below.
See our latest analysis for Ridley
ASX:RIC Ownership Breakdown January 21st 2024
What Does The Institutional Ownership Tell Us About Ridley?
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.
Ridley 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 Ridley's historic earnings and revenue below, but keep in mind there's always more to the story.
ASX:RIC Earnings and Revenue Growth January 21st 2024
Ridley is not owned by hedge funds. Insitor Holdings, LLC is currently the largest shareholder, with 19% of shares outstanding. With 5.1% and 4.7% of the shares outstanding respectively, Dimensional Fund Advisors LP and Schroder Investment Management Limited are the second and third largest shareholders. In addition, we found that Quinton Hildebrand, the CEO has 0.9% of the shares allocated to their name.
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.
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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Ridley
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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our most recent data indicates that insiders own some shares in Ridley Corporation Limited. It has a market capitalization of just AU$862m, and insiders have AU$54m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, mostly comprising of individual investors, collectively holds 52% of Ridley shares. 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 Company Ownership
We can see that Private Companies own 21%, 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:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 1 warning sign for Ridley you should be aware of.
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.
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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.
