Nine Entertainment Co. Holdings Limited (ASX:NEC)’s recent 3.3% drop adds to its one-year losses, institutional investors may consider taking drastic action

If you want to know who really controls Nine Entertainment Co. Holdings Limited (ASX:NEC), you need to look at the composition of the share register. And the group holding the biggest piece of the pie are institutions with 47% ownership. In other words, the group will gain the most (or lose the most) from their investment in the company.

And institutional investors saw their holdings fall 3.3% last week. This group of investors may be particularly concerned about the current loss, which adds to a 29% year-over-year loss for shareholders. Institutions or “liquidity providers” control large sums of money and therefore these types of investors usually have a large influence on stock price movements. Therefore, if the decline continues, institutional investors could be pressured to sell Nine Entertainment Holdings, which could hurt individual investors.

In the chart below, we zoom in on the different ownership groups of Nine Entertainment Holdings.

Check out our latest analysis for Nine Entertainment Holdings

property breakdown

property breakdown

What Does Institutional Ownership Tell Us About Nine Entertainment Holdings?

Many institutions measure their performance against an index that approximates the local market. As a result, they tend to pay more attention to companies that are included in major indices.

Nine Entertainment Holdings already has institutions on the share register. In fact, they own a respectable stake in the company. This suggests some credibility among professional investors. But we can’t rely on that alone, as institutions sometimes make bad investments, just like everyone else. When multiple institutions own a stock, there is always a risk that they will find themselves in a “crowded trade”. When such a trade goes awry, multiple parties can compete to sell shares quickly. This risk is higher in a company without a growth history. You can check Nine Entertainment Holdings historical earnings and earnings below but remember there is still more to be told.

Profit and Revenue Growth

Profit and Revenue Growth

We find that hedge funds have no meaningful investment in Nine Entertainment Holdings. Birketu Pty. ltd is currently the company’s largest shareholder with 15% of outstanding shares. Pendal Group Limited and Yarra Capital Management are the second and third largest shareholders with 9.0% and 5.1% of the outstanding shares respectively.

Upon further examination, we found that more than half of the company’s stock is owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are to some extent balanced by the smaller ones.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiment to know which way the wind is blowing. There are a fair number of analysts covering the stock, so it might be helpful to get their overall view on the future.

Insider ownership of nine entertainment holdings

The definition of an insider may differ slightly from country to country, but board members always count. The management of the company is accountable to the board of directors, which should represent the interests of the shareholders. It is noteworthy that sometimes high-ranking managers themselves sit on the board.

Most view insider ownership as a positive, as it can indicate that the board is well aligned with other shareholders. In some cases, however, too much power is concentrated within this group.

Our latest data shows that insiders own less than 1% of Nine Entertainment Co. Holdings Limited. However, it is possible that insiders could have an indirect interest through a more complex structure. Keep in mind that this is a large company and the insiders own A$3.5 million worth of shares. The absolute value might be more important than the proportional part. It’s good to see board members own shares, but it might be worth checking to see if those insiders bought.

General Public Property

With a 38% stake, the general public, consisting mostly of individual investors, has some influence on Nine Entertainment Holdings. While this ownership may not be sufficient to sway a policy decision in their favor, they can still collectively influence company policy.

Private company property

Our data shows that private companies own 15% of the company’s shares. It’s hard to draw any conclusions from this fact alone, so it’s worth investigating who owns these private companies. Sometimes insiders or other related parties have an interest in stock in a public company through a separate private company.

Next Steps:

I find it very interesting to see who exactly owns a company. But to really gain insight, we need to consider other information as well. Note that Nine Entertainment Holdings is shown 1 warning sign in our investment analysis you should know that…

If you’d rather learn what analysts are predicting for future growth, don’t miss this one free Analyst forecast report.

Note: The figures in this article are calculated using data for the last twelve months, relating to the 12-month period ending on the last date of the month to which the financial statements are dated. This may not tally with the annual report figures for the full year.

Do you have any feedback about this article? Concerned about the content? Get in touch directly with us. Alternatively, send an email to the editorial team (at) simplywallst.com.

This Simply Wall St article is of a general nature. We provide comments based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your goals or financial situation. Our goal is to offer you long-term focused analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.

Join a paid user research session
You will receive one $30 Amazon Gift Card for 1 hour of your time while you help us create better investment tools for individual investors like you. Sign up here

source

Leave a Reply

Your email address will not be published. Required fields are marked *