Diversified United Investment Limited (ASX:DUI)’s largest shareholders are retail investors with 53% ownership, and institutional investors owning 40%.

key insights

• Significant control over Decentralized United Investments by individual investors means the general public has more power to influence management and governance-related decisions

• 47% of the business is owned by the top 19 shareholders

• Recent purchases by insiders

A look at the shareholders of Diversified United Investment Limited (ASX:DUI) can tell us which group is the most powerful. Individual investors hold 53% of the shares, making them the largest holders of the company. In other words, this group faces the greatest upside potential (or downside risk).

Meanwhile, institutional investors account for 40% of the company’s shareholders. Institutions often own shares in more established companies, while it’s not uncommon to see insiders own a fair bit of smaller companies.

The chart below zooms in on the different ownership groups for Diversified United Investment.

Check out our latest analysis for Decentralized United Investments.

What does institutional ownership tell us about Decentralized United Investing?

Many institutions measure performance based on indicators that approximate local markets. So they usually pay more attention to companies that are included in major indices.

We can see that Diversified United Investment has institutional investors. And they own a significant portion of the company’s stock. This implies the analysts working for these institutions have considered the stock and they like it. But just like anyone else, they can be wrong. When multiple institutions own a stock, there’s always a risk that they are in a ‘crowded trade’. If such a trade goes wrong, multiple parties may compete to sell stock quickly. This risk is higher for companies without a history of growth. You can see Diversified United Investment’s historic earnings and revenue below, but keep in mind there’s always more to the story.

Diversified United Investment is not owned by hedge funds. The company’s largest shareholder is the Ian Potter Foundation, an endowment arm, with an ownership of 17%. On the other hand, the second and third largest shareholders hold about 7.5% of the stock and his own 6.6%.

story continues

After checking our ownership data, we found that the 19 top shareholders collectively own less than 50% of the share registry. This means that no single individual has a majority interest.

Researching institutional ownership is a good way to assess and filter a stock’s expected performance. The same can be done by studying analyst sentiment. As far as we know, there isn’t any analyst coverage of the company, so it’s probably flying under the radar.

Insider Ownership of Decentralized United Investments

The definition of a company insider can be subjective and varies by jurisdiction. Our data reflects individual insiders, and at least captures board members. A company’s management runs the business, but the CEO answers to the board, even if he or she is a member of the board.

Most consider insider ownership a positive, because it can indicate the board is well aligned with other shareholders. However, in some cases, too much power may be concentrated within this group.

Shareholders would probably be interested to know that insiders own shares in Diversified United Investment Limited. The insider personally owns AU$50m worth of his shares in the company, with a total value of AU$1.1b. It’s good to see insider investment, so it might be worth checking if those insiders have been buying.

Open to the public

The general public, mostly retail investors, collectively own 53% of Diversified United Investment shares. This level of ownership gives retail investors a degree of power to influence important policy decisions such as board composition, executive compensation, and dividend payout ratios.

Next steps:

It’s always worth thinking about the different groups who own shares in a company. But to better understand Decentralized United Investing, you need to consider many other factors.

I like to dive deeper Analyze how a company has performed in the past. Click here for past revenue and profits. Detailed graph.

If you want to check out another company with potentially better financials, don’t miss this free A list of interesting companies backed by strong financial data.

Note: The numbers in this article are calculated using data from the previous 12 months and refer to the 12-month period ending on the last day of the month in which the financial statements are dated. This may not match the 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 using only unbiased methodologies, and the articles are not intended as financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.