Key Insights

The considerable ownership by retail investors in Incitec Pivot indicates that they collectively have a greater say in management and business strategy The top 25 shareholders own 49% of the company 40% of Incitec Pivot is held by Institutions

To get a sense of who is truly in control of Incitec Pivot Limited (ASX:IPL), it is important to understand the ownership structure of the business. With 50% stake, retail investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 3.9% decrease in the stock price last week, retail investors suffered the most losses, but institutions who own 40% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of Incitec Pivot.

See our latest analysis for Incitec Pivot  ownership-breakdown

What Does The Institutional Ownership Tell Us About Incitec Pivot?

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.

As you can see, institutional investors have a fair amount of stake in Incitec Pivot. 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. 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 Incitec Pivot, (below). Of course, keep in mind that there are other factors to consider, too. earnings-and-revenue-growth

It looks like hedge funds own 9.1% of Incitec Pivot shares. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Looking at our data, we can see that the largest shareholder is Janchor Partners Limited with 9.1% of shares outstanding. The second and third largest shareholders are The Vanguard Group, Inc. and Orbis Investment Management Limited, with an equal amount of shares to their name at 6.3%.

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.



Insider Ownership Of Incitec Pivot

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that Incitec Pivot Limited insiders own under 1% of the company. Keep in mind that it's a big company, and the insiders own AU$7.7m worth of shares. The absolute value might be more important than the proportional share. 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 50% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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 Incitec Pivot .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this freereport on analyst forecasts.

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.