Can We See Significant Institutional Ownership On The Genworth Mortgage Insurance Australia Limited (ASX:GMA) Share Register?
Every investor in Genworth Mortgage Insurance Australia Limited (ASX:GMA) should be aware of the most powerful shareholder groups. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that have been privatized tend to have low insider ownership.
Genworth Mortgage Insurance Australia is a smaller company with a market capitalization of AU$962m, so it may still be flying under the radar of many institutional investors. In the chart below below, we can see that institutional investors have bought into the company. Let’s delve deeper into each type of owner, to discover more about GMA.
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What Does The Institutional Ownership Tell Us About Genworth Mortgage Insurance Australia?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
We can see that Genworth Mortgage Insurance Australia does have institutional investors; and they hold 28% of the stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Genworth Mortgage Insurance Australia’s historic earnings and revenue, below, but keep in mind there’s always more to the story.
Hedge funds don’t have many shares in Genworth Mortgage Insurance Australia. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Genworth Mortgage Insurance Australia
The definition of company insiders can be subjective, and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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 information suggests that Genworth Mortgage Insurance Australia Limited insiders own under 1% of the company. It appears that the board holds about AU$6.7m worth of stock. This compares to a market capitalization of AU$962m. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.
General Public Ownership
The general public, with a 16% stake in the company, will not easily be ignored. 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
It appears to us that public companies own 55% of GMA. We can’t be certain, but this 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 Genworth Mortgage Insurance Australia better, we need to consider many other factors.
I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
