Institutions profited after BlueScope Steel Limited's (ASX:BSL) market cap rose AU$343m last week but retail investors profited the most
In This Article:
Key Insights
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The considerable ownership by retail investors in BlueScope Steel indicates that they collectively have a greater say in management and business strategy
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The top 25 shareholders own 35% of the company
Every investor in BlueScope Steel Limited (ASX:BSL) should be aware of the most powerful shareholder groups. With 60% 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).
While retail investors were the group that benefitted the most from last week’s AU$343m market cap gain, institutions too had a 40% share in those profits.
Let's delve deeper into each type of owner of BlueScope Steel, beginning with the chart below.
Check out our latest analysis for BlueScope Steel
What Does The Institutional Ownership Tell Us About BlueScope Steel?
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.
BlueScope Steel 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. 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 BlueScope Steel, (below). Of course, keep in mind that there are other factors to consider, too.
We note that hedge funds don't have a meaningful investment in BlueScope Steel. Looking at our data, we can see that the largest shareholder is BlackRock, Inc. with 6.7% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.3% and 5.3% of the stock.
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 it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.