The large groups of shareholders of Embassy Office Parks REIT (NSE: EMBASSY) have power over the company. Generally speaking, as a business grows, institutions increase their participation. Conversely, insiders often decrease their ownership over time. Warren Buffett said he enjoys “a business with sustainable competitive advantages that is led by skilled, owner-oriented people.” So it’s nice to see some insider ownership as it may suggest that the management is owner-driven.
With a market cap of 297 billion yen, Embassy Office Parks REIT is pretty big. We would expect to see institutional investors on the register. Companies of this size are also generally well known to retail investors. In the graph below, we can see that the institutions hold shares in the company. Let’s dig deeper into each type of owner to find out more about Embassy Office Parks REIT.
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What does institutional ownership tell us about Embassy Office Parks REIT?
Many institutions measure their performance against an index that approximates the local market. Thus, they generally pay more attention to companies that are included in the major indices.
As you can see, institutional investors hold a significant share of the capital of Embassy Office Parks REIT. This suggests some credibility among professional investors. But we cannot rely on this fact alone because institutions sometimes make bad investments, like everyone else. It is not uncommon to see a sharp drop in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking out the history of Embassy Office Parks REIT’s past earnings (below). Of course, keep in mind that there are other factors to consider as well.
We note that hedge funds do not have a significant investment in Embassy Office Parks REIT. The company’s largest shareholder is The Blackstone Group Inc., with a 33% stake. The second and third shareholders are Capital Research and Management Company and Embassy Property Developments Private Limited, with an equal number of shares in their name at 12%.
A more detailed study of the register of shareholders showed us that 3 of the main shareholders hold a considerable share of the ownership of the company, through their 58% stake.
While it makes sense to study a company’s institutional ownership data, it also makes sense to study analysts’ sentiments to know which way the wind is blowing. There are a lot of analysts covering the stock, so you can look at expected growth quite easily.
Embassy Office Parks REIT Insider Property
The definition of an insider may differ slightly from country to country, but board members still count. The management of the company manages the company, but the CEO will report to the board of directors, even if he is a member of the board.
I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.
Our most recent data indicates that insiders own shares in Embassy Office Parks REIT. It’s a pretty big company, so it’s generally positive to see a potentially meaningful alignment. In this case, they own around 16 billion yen of shares (at current prices). It’s good to see this level of investment from the insiders. You can check here if these insiders have bought recently.
General public property
The general public, with a 21% stake in the company, will not be easily ignored. While this property size may not be enough to influence a policy decision in their favor, they can still have a collective impact on company policies.
Private equity firms hold a 33% stake in Embassy Office Parks REIT. This suggests that they can influence key policy decisions. Some investors might be encouraged by this, as private equity is sometimes able to encourage strategies that help the market see the value of the business. Alternatively, these holders could withdraw from the investment after making it public.
Owned by a private company
Our data indicates that private companies own 17% of the company’s shares. It might be worth pursuing the matter further. If related parties, such as insiders, have an interest in any of these private companies, this should be disclosed in the annual report. Private companies may also have a strategic interest in the business.
It’s always worth thinking about the different groups that own shares in a company. But to better understand Embassy Office Parks REIT, there are many other factors that we need to consider. For example, we discovered 4 warning signs for Embassy Office Parks REIT which you should know before investing here.
If you are like me, you might want to ask yourself if this business will grow or shrink. Fortunately, you can check out this free report showing analysts’ forecasts for its future.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
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