A look at the shareholders of UK Commercial Property REIT Limited (LON:UKCM) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 38% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And institutional investors endured the highest losses after the company’s share price fell by 9.1% last week. This set of investors may especially be concerned about the current loss, which adds to a one-year loss of 16% for shareholders. Often called “market makers”, institutions wield significant power in influencing the price dynamics of any stock. As a result, if the decline continues, institutional investors may be pressured to sell UK Commercial Property REIT which might hurt individual investors.
In the chart below, we zoom in on the different ownership groups of UK Commercial Property REIT.
However if you’d rather see where the opportunities and risks are within UKCM’s industry, you can check out our analysis on the GB REITs industry.
What Does The Institutional Ownership Tell Us About UK Commercial Property REIT?
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.
UK Commercial Property REIT already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It’s therefore worth looking at UK Commercial Property REIT’s earnings history below. Of course, the future is what really matters.
Hedge funds don’t have many shares in UK Commercial Property REIT. The company’s largest shareholder is Phoenix Group Holdings plc, with ownership of 34%. For context, the second largest shareholder holds about 11% of the shares outstanding, followed by an ownership of 9.7% by the third-largest shareholder.
After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company’s shares, implying that they have considerable power to influence the company’s decisions.
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. As far as we can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of UK Commercial Property REIT
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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.
Our data suggests that insiders own under 1% of UK Commercial Property REIT Limited in their own names. It has a market capitalization of just UK£806m, and the board has only UK£248k worth of shares in their own names. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.
General Public Ownership
With a 28% ownership, the general public, mostly comprising of individual investors, have some degree of sway over UK Commercial Property REIT. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Public Company Ownership
Public companies currently own 34% of UK Commercial Property REIT stock. We can’t be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
Next Steps:
It’s always worth thinking about the different groups who own shares in a company. But to understand UK Commercial Property REIT better, we need to consider many other factors. For example, we’ve discovered 3 warning signs for UK Commercial Property REIT (1 is concerning!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Valuation is complex, but we’re helping make it simple.
Find out whether UK Commercial Property REIT is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
