Perpetual Limited's (ASX:PPT) largest shareholders are retail investors with 43% ownership, institutions own 41%
In This Article:
Key Insights
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The considerable ownership by retail investors in Perpetual indicates that they collectively have a greater say in management and business strategy
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50% of the business is held by the top 18 shareholders
If you want to know who really controls Perpetual Limited (ASX:PPT), then you'll have to look at the makeup of its share registry. With 43% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
Meanwhile, institutions make up 41% of the company’s shareholders. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.
In the chart below, we zoom in on the different ownership groups of Perpetual.
Check out our latest analysis for Perpetual
What Does The Institutional Ownership Tell Us About Perpetual?
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.
As you can see, institutional investors have a fair amount of stake in Perpetual. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Perpetual's historic earnings and revenue below, but keep in mind there's always more to the story.
We note that hedge funds don't have a meaningful investment in Perpetual. Washington H. Soul Pattinson and Company Limited is currently the company's largest shareholder with 12% of shares outstanding. State Street Global Advisors, Inc. is the second largest shareholder owning 7.2% of common stock, and BlackRock, Inc. holds about 4.2% of the company stock.
A closer look at our ownership figures suggests that the top 18 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.