Key Insights

• The considerable ownership by retail investors in Data#3 indicates that they collectively have a greater say in management and business strategy
• A total of 25 investors have a majority stake in the company with 37% ownership
• Recent sales by insiders

We've discovered 2 warning signs about Data#3. View them for free.

To get a sense of who is truly in control of Data#3 Limited (ASX:DTL), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 60% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 7.9% increase in the stock price last week, retail investors profited the most, but institutions who own 31% stock also stood to gain from the increase.

In the chart below, we zoom in on the different ownership groups of Data#3.

See our latest analysis for Data#3

What Does The Institutional Ownership Tell Us About Data#3?

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.

As you can see, institutional investors have a fair amount of stake in Data#3. 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. 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 Data#3's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Data#3. Our data shows that State Street Global Advisors, Inc. is the largest shareholder with 5.4% of shares outstanding. The Vanguard Group, Inc. is the second largest shareholder owning 5.0% of common stock, and First Sentier Investors (Australia) IM Ltd holds about 3.2% of the company stock.

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.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Data#3

The definition of an insider can 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own some shares in Data#3 Limited. As individuals, the insiders collectively own AU$38m worth of the AU$1.1b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 60% stake in Data#3, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Company Ownership

It seems that Private Companies own 6.1%, of the Data#3 stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Data#3 better, we need to consider many other factors. For instance, we've identified 2 warning signs for Data#3 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.