Institutional investors own a significant stake of 41% in Serko Limited (NZSE:SKO)
In This Article:
Key Insights
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Significantly high institutional ownership implies Serko's stock price is sensitive to their trading actions
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52% of the business is held by the top 6 shareholders
To get a sense of who is truly in control of Serko Limited (NZSE:SKO), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are institutions with 41% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.
Let's delve deeper into each type of owner of Serko, beginning with the chart below.
Check out our latest analysis for Serko
What Does The Institutional Ownership Tell Us About Serko?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
Serko already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Serko's earnings history below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in Serko. Harbour Asset Management Limited is currently the largest shareholder, with 12% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.3% and 9.0% of the stock. Darrin Grafton, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.
On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.