What Type Of Shareholders Make Up D4t4 Solutions Plc's (LON:D4T4) Share Registry?

Simply Wall St

Wed, Jun 30, 2021, 8:35 PM 4 min read

A look at the shareholders of D4t4 Solutions Plc (LON:D4T4) can tell us which group is most powerful. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

D4t4 Solutions is a smaller company with a market capitalization of UK£136m, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholders can tell us about D4t4 Solutions.

See our latest analysis for D4t4 Solutions

ownership-breakdown — AIM:D4T4 Ownership Breakdown July 1st 2021

What Does The Institutional Ownership Tell Us About D4t4 Solutions?

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.

D4t4 Solutions 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of D4t4 Solutions, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth — AIM:D4T4 Earnings and Revenue Growth July 1st 2021

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. D4t4 Solutions is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Hargreave Hale Limited, Asset Management Arm with 18% of shares outstanding. Ennismore Fund Management Limited is the second largest shareholder owning 8.0% of common stock, and Herald Investment Management Limited holds about 7.4% of the company stock. Furthermore, CEO Peter Kear is the owner of 4.1% of the company's shares.

We also observed that the top 7 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of D4t4 Solutions

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 D4t4 Solutions Plc. It has a market capitalization of just UK£136m, and insiders have UK£13m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board, though I generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.

General Public Ownership

With a 21% ownership, the general public have some degree of sway over D4t4 Solutions. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we've spotted with D4t4 Solutions .

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.

This article by Simply Wall St is general in nature. 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.

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