Sunday, April 21, 2024
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Home » Positive Week for Navigator Global Investments Limited (ASX:NGI) Institutional Investors Who Lost 22% Over the Past Year

Positive Week for Navigator Global Investments Limited (ASX:NGI) Institutional Investors Who Lost 22% Over the Past Year

by Kane Guzman
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Every investor in Navigator Global Investments Limited (ASX:NGI) should be aware of the most powerful shareholder groups. We can see that institutions own the lion’s share in the company with 52% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Last week’s AU$28m market cap gain would probably be appreciated by institutional investors, especially after a year of 22% losses.

In the chart below, we zoom in on the different ownership groups of Navigator Global Investments.

What Does The Institutional Ownership Tell Us About Navigator Global Investments?

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 Navigator Global Investments. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there’s always a risk that they are in a ‘crowded trade’. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Navigator Global Investments’ historic earnings and revenue below, but keep in mind there’s always more to the story.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don’t have many shares in Navigator Global Investments. Looking at our data, we can see that the largest shareholder is Neuberger Berman Australia Pty Limited with 17% of shares outstanding. With 13% and 8.2% of the shares outstanding respectively, Perennial Value Management Limited and Sean McGould are the second and third largest shareholders. Sean McGould, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

On further inspection, we found that more than half the company’s shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock’s expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Navigator Global Investments

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems insiders own a significant proportion of Navigator Global Investments Limited. It has a market capitalization of just AU$264m, and insiders have AU$28m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 36% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Navigator Global Investments. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand Navigator Global Investments better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we’ve spotted 2 warning signs for Navigator Global Investments you should know about.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

Source : Simply Wall

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