Transurban Group (ASX:TCL) down to AU$41b market cap, but institutional owners may not be as affected after a year of 8.3% returns
In This Article:
Key Insights
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Significantly high institutional ownership implies Transurban Group's stock price is sensitive to their trading actions
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47% of the business is held by the top 25 shareholders
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Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company
If you want to know who really controls Transurban Group (ASX:TCL), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are institutions with 54% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
No shareholder likes losing money on their investments, especially institutional investors who saw their holdings drop 3.1% in value last week. However, the 8.3% one-year return to shareholders may have helped lessen their pain. They should, however, be mindful of further losses in the future.
Let's take a closer look to see what the different types of shareholders can tell us about Transurban Group.
See our latest analysis for Transurban Group
What Does The Institutional Ownership Tell Us About Transurban Group?
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.
As you can see, institutional investors have a fair amount of stake in Transurban Group. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Transurban Group's historic earnings and revenue below, but keep in mind there's always more to the story.
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Transurban Group is not owned by hedge funds. Our data shows that UniSuper Limited is the largest shareholder with 10% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.2% and 6.0%, of the shares outstanding, respectively.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.