If you want to know who really controls Deep Yellow Limited (ASX:DYL), then youll have to look at the makeup of its share registry. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Warren Buffett said that he likes a business with enduring competitive advantages that is run by able and owner-oriented people. So its nice to see some insider ownership, because it may suggest that management is owner-oriented.
Deep Yellow is not a large company by global standards. It has a market capitalization of AU$45m, which means it wouldnt have the attention of many institutional investors. In the chart below, we can see that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about Deep Yellow.
Check out our latest analysis for Deep Yellow
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once its included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
Deep Yellow already has institutions on the share registry. Indeed, they own 7.8% of the company. This suggests some credibility amongst professional investors. But we cant rely on that fact alone, since institutions make bad investments sometimes, just like everyone does. 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 Deep Yellow, (below). Of course, keep in mind that there are other factors to consider, too.
We note that hedge funds dont have a meaningful investment in Deep Yellow. Resource Capital Investment Corporation is currently the largest shareholder, with 12% of shares outstanding. Next, we have Collines Investments Ltd and Paradice Investment Management Pty Ltd. as the second and third largest shareholders, holding 8.0% and 7.3%, of the shares outstanding, respectively.
A deeper look at our ownership data shows that the top 24 shareholders collectively hold less than 50% of the register, suggesting a large group of small holders where no one share holder has a majority.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Our information suggests that there isnt any analyst coverage of the stock, so it is probably little known.
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.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
It seems insiders own a significant proportion of Deep Yellow Limited. Insiders own AU$5.0m worth of shares in the AU$45m company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
The general public, who are mostly retail investors, collectively hold 59% of Deep Yellow shares. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.
Private equity firms hold a 12% stake in DYL. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and as the name suggests dont invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
It seems that Private Companies own 10%, of the DYL stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Its always worth thinking about the different groups who own shares in a company. But to understand Deep Yellow better, we need to consider many other factors. Like risks, for instance. Every company has them, and weve spotted 5 warning signs for Deep Yellow (of which 1 makes us a bit uncomfortable!) you should know about.
Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.
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.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
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Do Insiders Own Lots Of Shares In Deep Yellow Limited (ASX:DYL)? - Simply Wall St
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