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key insights
High institutional ownership means Nine Entertainment’s share price is sensitive to its trading behavior
The company has a total of 6 investors holding shares, holding 50% of the shares
Ownership Research and Analyst Forecast Data Helps provide a good understanding of equity opportunities
If you want to know who really controls Nine Entertainment Holdings Limited (ASX Code: NEC), then you will have to look at the makeup of its shared registry. Institutions hold 57% of the shares, the highest shareholding ratio. In other words, the group will gain the most (or lose the most) from their investment in the company.
Because institutional owners have substantial resources and liquidity, their investment decisions often carry a lot of influence, especially for individual investors. Therefore, investing large amounts of institutional money in companies is often seen as a desirable quality.
In the image below, we zoom in on the different ownership groups of Nine Entertainment Holdings.
View our latest analysis for Nine Entertainment Holdings
What does institutional ownership tell us about Nine Entertainment Holdings?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to the companies that are included in the main index.
As you can see, institutional investors hold a large stake in Nine Entertainment Holdings. This shows that professional investors have some credibility. But we can’t just rely on that fact, because institutions sometimes make bad investments, just like everyone. When multiple institutions own a stock, they always run the risk of being in a “crowded trade”. When such a deal goes wrong, multiple parties can race to sell shares quickly. This risk is higher in companies without a history of growth. You can view Nine Entertainment Holdings’ historical earnings and revenue below, but remember there’s always more to the story.
Investors should note that institutions effectively own more than half of the company, so collectively they can wield significant power. Hedge funds don’t have much stake in Nine Entertainment Holdings. Looking at our data, we can see that the largest shareholder is Birketu Pty. Ltd. with 16% of outstanding shares. In contrast, the second and third largest shareholders hold about 9.8% and 9.2% respectively.
We also observed that the top 6 shareholders accounted for more than half of the total share capital, and a small number of small shareholders balanced the interests of major shareholders to a certain extent.
While researching a company’s institutional ownership can add value to your research, it’s also good practice to research analysts’ recommendations to gain a deeper understanding of a stock’s expected performance. There are plenty of analysts covering this stock, so it’s worth checking out their forecasts as well.
Insider Ownership of Nine Entertainment Holdings
The definition of an insider may vary slightly in different countries, but board members always matter. Company management runs the business, but the CEO will be accountable to the board, even if he or she is a member of the board.
It is positive when insider ownership shows that leadership thinks like the real owners of the company. However, high insider ownership can also confer enormous power on a small group of people within the company. In some cases this can be negative.
Our data shows that insiders own less than 1% of Nine Entertainment Holdings Ltd shares in their own name. However, we do note that insiders may have indirect interests through private companies or other corporate structures. Remember, this is a large company with insiders owning shares worth A$3.6 million. Absolute values may be more important than proportional shares. Arguably, recent buys and sells are just as important.you can Click here to see if insiders have been buying or selling.
General public ownership
The public, usually individual investors, owns 27 percent of Nine Entertainment Holdings. While ownership on this scale may not be enough to turn policy decisions in their favor, they can still have a collective influence on company policy.
private company ownership
A private company appears to own a 16 percent stake in Nine Entertainment Holdings. Might be worth digging a little deeper. If a related party (such as an insider) has an interest in one of the private companies, this should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next step:
While it’s well worth considering the different groups that own a company, there are other, more important factors. Consider, for example, the ever-present specter of investment risk. We’ve identified 1 warning sign Yu Nine Entertainment Holdings understanding them should be part of your investing process.
If you’d rather read what analysts are forecasting for future growth, don’t miss this free Analyst Forecast Report.
Note: Figures in this article are calculated using data from the trailing 12 months, which refers to the 12-month period ending on the last day of the month on which the financial statements are dated. This may not be consistent with the annual reported figures for the full year.
Have feedback on this article? Concerned about content? keep in touch Contact us directly. Alternatively, email the editorial team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We use only an unbiased methodology to provide reviews based on historical data and analyst forecasts, 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 into account your objectives or your financial situation. Our goal is to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no positions in any of the stocks mentioned.
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