Is Domino’s Pizza Enterprises Limited (ASX: DMP) popular among insiders?
Every investor in Domino’s Pizza Enterprises Limited (ASX: DMP) needs to know the most powerful shareholder groups. Institutions often own shares in larger companies, and we would expect insiders to own a noticeable percentage of smaller ones. I generally like to see some degree of insider ownership, even if it’s just a little. As Nassim Nicholas Taleb said, “Don’t tell me what you think, tell me what you have in your wallet.
Domino’s Pizza Enterprises has a market cap of A $ 13 billion, so it’s too big to go unnoticed. We expect institutions and retail investors to own a portion of the company. Our analysis of company ownership, below, shows that institutions own shares in the company. We can zoom in on the different ownership groups, to find out more about Domino’s Pizza Enterprises.
Check out our latest review for Domino’s Pizza Enterprises
What does institutional ownership tell us about Domino’s Pizza Enterprises?
Many institutions measure their performance against an index that approximates the local market. Thus, they generally pay more attention to companies that are included in the major indices.
As you can see, institutional investors have a significant stake in Domino’s Pizza Enterprises. This may indicate that the company has a certain degree of credibility in the investment community. However, it’s best to beware of relying on the so-called validation that comes with institutional investors. They too are sometimes wrong. It is not uncommon to see a sharp drop in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking out Domino’s Pizza Enterprises’ past revenue trajectory (below). Of course, keep in mind that there are other factors to consider as well.
Institutional investors own more than 50% of the company, so together they can likely have a strong influence on the decisions of the board. Domino’s Pizza Enterprises is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Somad Holdings Pty. Ltd. with 27% of the shares outstanding. With 6.7% and 6.3% of shares outstanding, respectively, Bangarra Group and Colonial First State Investments Limited are the second and third shareholders. In addition, the CEO of the company, Donald Meij, directly owns 2.1% of the total shares outstanding.
To make our study more interesting, we found that the top 5 shareholders control more than half of the company, which implies that this group has considerable influence on the decision-making of the company.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand the expected performance of a stock. There are a reasonable number of analysts covering the stock, so it can be helpful to know their overall vision for the future.
Insider property of Domino’s Pizza Enterprises
The definition of company insiders can be subjective and vary from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management of the company is accountable to the board of directors and the board must represent the interests of the shareholders. Notably, sometimes senior executives themselves sit on the board of directors.
Insider ownership is positive when it indicates that executives think like the real owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
We can see that the insiders own shares in Domino’s Pizza Enterprises Limited. Insiders own shares worth A $ 681 million (at current prices). Most would say this shows a good alignment of interests between shareholders and the board. Still, it might be worth checking out if these insiders have sold.
General public property
The general public, with a 15% stake in the company, will not be easily ignored. While this property size may not be enough to influence a policy decision in their favor, they can still have a collective impact on company policies.
Owned by a private company
It appears that private companies own 27% of the shares of Domino’s Pizza Enterprises. Private companies can be related parties. Sometimes insiders have an interest in a public company through a stake in a private company, rather than in their own capacity as an individual. While it is difficult to draw general conclusions, it should be noted that this is an additional area of research.
While it is worth considering the different groups that own a business, there are other factors that are even more important. To do this, you need to know the 2 warning signs we spotted with Domino’s Pizza Enterprises.
Ultimately the future is the most important. You can access this free analyst forecast report for the company.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St does not have any position in the mentioned stocks.
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