With 56% institutional ownership, Wharf Real Estate Investment Company Limited (HKG:1997) is a favorite amongst the big guns
To get a sense of who really is in control of Wharf Real Estate Investment Company Limited (HKG: 1997), it is important to understand the company’s ownership structure. The group with the largest number of shares in the company, or more precisely around 56%, are institutions. That is, the group gains the most when the stock rises (or loses the most when there is a downturn).
Given the enormous amount of money and research capacity at their disposal, institutional ownership tends to carry a heavy weight, especially among retail investors. For this reason, a significant amount of institutional money invested in a company is generally considered a positive trait.
In the following graphic we enlarge the different groups of owners of Wharf Real Estate Investment.
Check out our latest analysis for Wharf Real Estate Investment
SEHK: 1997 Property Breakdown December 8, 2021
What does institutional ownership tell us about Wharf Real Estate Investment?
Institutional investors often compare their own returns to the returns of a frequently tracked index. As a result, they typically consider buying larger companies that are included in the relevant benchmark index.
Wharf Real Estate Investment already has institutions on its share register. In fact, they own a respectable stake in the company. This implies that the analysts who work for these institutions have looked at the stock and like it. But like everyone else, they can be wrong too. It is not uncommon for the stock price to drop sharply when two large institutional investors are trying to sell a stock at the same time. So it’s worth checking out Wharf Real Estate Investment’s earnings history so far (below). Of course, keep in mind that there are other factors to consider as well.
With institutional investors owning more than half of the stocks in issue, the board of directors will likely need to be mindful of their preferences. Please note that hedge funds are not a sensible investment in Wharf Real Estate Investment. Wheelock and Company Limited is currently the largest shareholder with 46% of the shares issued. Vision Expert (0004) Limited is the second largest shareholder with 4.2% of the common stock, and The Vanguard Group, Inc. owns approximately 2.2% of the company’s stock.
After further research, we found that the top 3 shareholders collectively control more than half of the company’s shares, which means they have significant influence over the company’s decisions.
While studying the institutional ownership of a company can add value to your research, researching analyst recommendations to get a deeper understanding of a stock’s expected performance is also good practice. There are plenty of analysts covering the stock so it might be worthwhile to see what they are forecasting as well.
Inside ownership of Wharf Real Estate Investment
While the exact definition of an insider can be subjective, almost every board member considers an insider. Management ultimately replies to the board. However, it is not uncommon for managers to be board members, especially when they are founders or CEOs.
Insider ownership is positive when it signals that management thinks like the real owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative under certain circumstances.
Our information suggests that Wharf Real Estate Investment Company Limited insiders own less than 1% of the company. But they may have an indirect interest through a corporate structure that we did not address. Since we’re so big, we wouldn’t expect insiders to own a large stake in the stock. Together they own HK $ 71 million in shares. It is equally important to consider recent purchases and sales. You can click here to see if Insiders bought or sold.
General public property
At 38%, the general public, composed mostly of individual investors, has some influence on Wharf Real Estate Investment. While this ownership structure may not be sufficient to sway a political decision in your favor, it can still have a collective influence on company policy.
Ownership of private companies
Our data shows that private companies hold 5.6% of the company’s shares. It might be worth looking into in more detail. If related parties, such as insiders, are involved in any of these private companies, this should be disclosed in the annual report. Private companies can also have a strategic interest in the company.
Next Steps:
It is always worthwhile to think about the different groups that own shares in a company. But to better understand Wharf Real Estate Investment we need to consider many other factors. For example we discovered 1 warning sign for Wharf Real Estate Investment that you should know before investing here.
But in the end it is the future, not the past that will determine how well the owners of this company will fare. Hence, we think it wise to take a look at this free report which shows whether analysts are predicting a brighter future.
Note: The numbers in this article are calculated using data for the past twelve months, which refers to the twelve month period ending on the last day of the month in which the year-end closing is dated. This may not match the figures in the financial statements.
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This article from Simply Wall St is of a general nature. We only provide comments based on historical data and analyst projections using an unbiased methodology, and our articles are not intended as financial advice. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. Our goal is to provide you with long-term, focused analysis based on fundamentals. Note that our analysis may not take into account the latest company announcements or quality material, which may be sensitive to the price. Simply Wall St has no position in any of the stocks mentioned.