The large groups of shareholders of Embassy Office Parks REIT (NSE: EMBASSY) have power over the company. Institutions often own shares in more established companies, while it is not uncommon to see insiders owning a good number of smaller companies. I generally like to see some degree of insider ownership, even if it’s just a little. As Nassim Nicholas Taleb said, “Don’t tell me what you think, tell me what you have in your wallet.
Embassy Office Parks REIT has a market cap of 339 billion yen, so it’s too big to go unnoticed. We would expect institutions and retail investors to own a portion of the company. In the graphic below, we can see that the institutions are visible on the share register. We can zoom in on the different property groups to find out more about Embassy Office Parks REIT.
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What does institutional ownership tell us about Embassy Office Parks REIT?
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 businesses to have some institutions listed, especially if they are growing.
We can see that Embassy Office Parks REIT has institutional investors; and they own a good portion of the company’s shares. This may indicate that the company has a certain degree of credibility in the investment community. However, it is better to be careful not to rely on the so-called validation that accompanies institutional investors. They too are sometimes 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 Blackstone Inc. with 33% of the shares outstanding. For context, the second largest shareholder owns around 12% of the outstanding shares, followed by 12% ownership by the third largest shareholder.
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.
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 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
The definition of business insiders can be subjective and vary from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management of the company is accountable to the board of directors and the board must represent the interests of the shareholders. Notably, sometimes senior executives themselves sit on the board of directors.
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.
I can report that insiders own 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). If you would like to explore the issue of Insider Alignment, you can click here to see if any Insiders have bought or sold.
General public property
The general public, with a 15% stake in the company, will not be easily ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in line with other large shareholders.
With a 33% stake, private equity firms could influence the board of directors of Embassy Office Parks REIT. Some might like this, as private capital is sometimes activists holding management to account. But other times, the private equity sells, after you take the company public.
Owned by a private company
Our data indicates that private companies own 17% of the company’s shares. Private companies can be related parties. Sometimes insiders have an interest in a public company through a stake in a private company, rather than in their own capacity as an individual. While it is difficult to draw general conclusions, it should be noted that this is an area for further research.
While it is worth considering the different groups that own a business, there are other factors that are even more important. Consider, for example, the ever-present specter of investment risk. We have identified 4 warning signs with Embassy Office Parks REIT (at least 1 which is significant), and understanding them should be part of your investment process.
Ultimately the future is the most important. You can access this free analyst forecast report for the company.
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.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
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