A look at the shareholders of Embassy Office Parks REIT (NSE: EMBASSY) can tell us which group is more powerful. Large companies usually have institutions as shareholders, and we usually see insiders holding shares in smaller companies. 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.
Embassy Office Parks REIT is a fairly large company. It has a market capitalization of ₹ 334b. Normally, institutions would own a significant share of a company of this size. Looking at our data on ownership groups (below), it appears that institutions own 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?
Institutional investors generally compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.
Embassy Office Parks REIT already has institutions registered in the share register. Indeed, they hold a respectable stake in the company. This implies that analysts working for these institutions have reviewed the action and appreciate it. But like everyone else, they could be wrong. 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.
Hedge funds don’t have a lot of stock in Embassy Office Parks REIT. Looking at our data, we can see that the largest shareholder is The Blackstone Group Inc. with 33% of the shares outstanding. The second and third shareholders are Embassy Property Developments Private Limited and Capital Research and Management Company, with an equal number of shares in their name at 12%.
To make our study more interesting, we found that the top 3 shareholders have a controlling stake in the company, which means that they are powerful enough to influence the decisions of the company.
Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be achieved by studying the feelings of analysts. There are a reasonable number of analysts covering the stock, so it can be helpful to know their overall vision for the future.
Embassy Office Parks REIT Insider Property
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Insider ownership is positive when it indicates that executives think like the real owners of the company. However, strong insider ownership can also confer immense power on a small group within the company. This can be negative in certain circumstances.
Shareholders would likely be interested to learn that insiders hold shares in Embassy Office Parks REIT. It’s a big company, so it’s good to see that level of alignment. Insiders own 18 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 has a 16% stake in Embassy Office Parks REIT. While this group cannot necessarily take the lead, it can certainly have a real influence on how the business is run.
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
We note that private companies hold 17% of the shares issued. 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.
I find it very interesting to see who exactly owns a company. But to really understand better, we have to take other information into account as well. To do this, you need to know the 2 warning signs we spotted with Embassy Office Parks REIT.
But finally it’s the future, not the past, which will determine the success of the owners of this business. Therefore, we believe it is advisable to take a look at this free report showing whether analysts are predicting a better 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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