| Why Target Energy Limited’s (ASX:TEX) Investor Composition Impacts Your Returns | |
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Institutional OwnershipTEX’s 10.34% institutional ownership seems enough to cause large share price movements in the case of significant share sell-off or acquisitions by institutions, particularly when there is a low level of public shares available on the market to trade. However, as not all institutions are alike, such high volatility events, especially in the short-term, have been more frequently linked to active market participants like hedge funds. In the case of TEX, investors need not worry about such volatility considering active hedge funds don’t have a significant stake. However, we should dig deeper into TEX’s ownership structure and find out how other key ownership classes can affect its investment profile. Insider OwnershipAnother important group of shareholders are company insiders. Insider ownership has to do more with how the company is managed and less to do with the direct impact of the magnitude of shares trading on the market. 28.47% ownership of TEX insiders is large enough to make an impact on shareholder returns. In general, this level of insider ownership has negatively affected underperforming (consistently low PE ratio) companies and positively affected the companies that outperform (consistently high PE ratio). It’s also interesting to learn what TEX insiders have been doing with their shareholdings lately. While insider buying is possibly a sign of a positive outlook for the company, selling doesn’t necessarily indicate a negative outlook as they may be selling to meet personal financial needs. General Public OwnershipA substantial ownership of 56.54% in TEX is held by the general public. This size of ownership gives retail investors collective power in deciding on major policy decisions such as executive compensation, appointment of directors and acquisitions of businesses. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and potential acquisitions. This is a positive sign for an investor who wants to be involved in key decision-making of the company. Private Company OwnershipAnother group of owners that a potential investor in TEX should consider are private companies, with a stake of 4.65%. While they invest more often due to strategic interests, an investment can also be driven by capital gains through share price appreciation. However, an ownership of this size may be relatively insignificant, meaning that these shareholders may not have the potential to influence TEX’s business strategy. Thus, investors not need worry too much about the consequences of these holdings. What this means for you:Are you a shareholder? The company’s high institutional ownership makes margin of safety a very important consideration to existing investors since long bull and bear trends often emerge when these big-ticket investors see a change in long-term potential of the company. This will allow investors to reduce the impact of non-fundamental factors, such as volatile block trading impact on their portfolio value. Looking for ways to reinforce your current portfolio holdings? Take a look at our free platform for a list of stocks with a strong growth potential. Are you a potential investor? Ownership structure should not be the only focus of your research when constructing an investment thesis around TEX. Rather, you should be examining fundamental factors like the intrinsic valuation of TEX, which is a key driver of TEX’s share price. Take a look at our most recent infographic report on TEX for a more in-depth analysis of these factors to help you make a more well-informed investment decision. 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. To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. |
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Target Energy Limited
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ProfilIndicateurs de MarchéVALEUR : Projets & res.Communiqués de PresseRapport annuelRISQUE : Profile actifs |
Target Energy LTD est une société basée en Australie. Target Energy LTD est cotée en Australie. Sa capitalisation boursière aujourd'hui est 82,5 millions AU$ (55,2 millions US$, 49,9 millions €). La valeur de son action a atteint son plus haut niveau récent le 01 avril 2011 à 0,12 AU$, et son plus bas niveau récent le 20 octobre 2017 à 0,00 AU$. Target Energy LTD possède 1 031 209 984 actions en circulation. |