Could The Inghams Group Limited (ASX:ING) Ownership Structure Tell Us Something Useful?

Simply Wall St

Wed, Apr 6, 2022, 6:30 PM 4 min read

If you want to know who really controls Inghams Group Limited (ASX:ING), then you'll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that have been privatized tend to have low insider ownership.

Inghams Group has a market capitalization of AU$1.1b, so we would expect some institutional investors to have noticed the stock. In the chart below, we can see that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about Inghams Group.

Check out our latest analysis for Inghams Group

ownership-breakdown — ASX:ING Ownership Breakdown April 7th 2022

What Does The Institutional Ownership Tell Us About Inghams Group?

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 Inghams Group. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Inghams Group, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth — ASX:ING Earnings and Revenue Growth April 7th 2022

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Inghams Group is not owned by hedge funds. Our data shows that AustralianSuper Pty. Ltd. is the largest shareholder with 9.8% of shares outstanding. For context, the second largest shareholder holds about 7.9% of the shares outstanding, followed by an ownership of 6.2% by the third-largest shareholder.

We did some more digging and found that 9 of the top shareholders account for roughly 53% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Inghams Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own less than 1% of Inghams Group Limited. It seems the board members have no more than AU$4.4m worth of shares in the AU$1.1b company. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 22% stake in Inghams Group. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Be aware that Inghams Group is showing 2 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.