To get a sense of who is truly in control of Westpac Banking Corporation (ASX:WBC), it is important to understand the ownership structure of the business.And the group that holds the biggest piece of the pie are retail investors with 71% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Meanwhile, institutions make up 29% of the company’s shareholders.Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.
Let's delve deeper into each type of owner of Westpac Banking, beginning with the chart below.
What Does The Institutional Ownership Tell Us About Westpac Banking?
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 Westpac Banking 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.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 Westpac Banking's earnings history below. Of course, the future is what really matters.
Hedge funds don't have many shares in Westpac Banking.BlackRock, Inc. is currently the largest shareholder, with 6.2% of shares outstanding.For context, the second largest shareholder holds about 5.7% of the shares outstanding, followed by an ownership of 5.6% by the third-largest shareholder.
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.Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Westpac Banking
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.
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 information suggests that Westpac Banking Corporation insiders own under 1% of the company.As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own AU$29m worth of shares.Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.
General Public Ownership
The general public -- including retail investors -- own 71% of Westpac Banking.With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.Take risks for example - Westpac Banking 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.
Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.
