Ares Commercial Real Estate Corporation (NYSE:ACRE) institutional owners may be pleased with recent gains after 20% loss over the past year
A look at the shareholders of Ares Commercial Real Estate Corporation (NYSE:ACRE) can tell us which group is most powerful. With 49% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
Institutional investors would probably welcome last week’s 8.9% increase in share prices after a year of 20% losses as a sign that returns are likely to begin trending higher.
Let’s take a closer look to see what the different types of shareholders can tell us about Ares Commercial Real Estate.
Our analysis indicates that ACRE is potentially undervalued!
NYSE:ACRE Ownership Breakdown October 18th 2022
What Does The Institutional Ownership Tell Us About Ares Commercial Real Estate?
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.
Ares Commercial Real Estate already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Ares Commercial Real Estate, (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 Ares Commercial Real Estate. BlackRock, Inc. is currently the largest shareholder, with 7.3% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.7% and 3.3%, of the shares outstanding, respectively.
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.
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.
Insider Ownership Of Ares Commercial Real Estate
The definition of an insider may differ slightly between different countries, but members of the board of directors always count. 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.
Shareholders would probably be interested to learn that insiders own shares in Ares Commercial Real Estate Corporation. It has a market capitalization of just US$589m, and insiders have US$17m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 48% stake in Ares Commercial Real Estate. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
next steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we’ve identified 3 warning signs for Ares Commercial Real Estate (2 don’t sit too well with us) that you should be aware of.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report 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.