Institutional owners can ignore Advance Terrafund REIT’s (BUL:ATER) recent market cap drop of £49m as longer-term earnings remain in the green

Any investor in Advance Terrafund REIT (BUL:ATER) should be aware of the most powerful shareholder groups. We can see that institutions own the lion’s share of the company at 41%. In other words, the group will gain the most (or lose the most) from their investment in the company.

Institutional investors suffered the heaviest losses after the company’s market cap fell by лв 49 million last week. However, the 49% one-year returns may have helped mitigate their overall losses. But they would probably be wary of future losses.

Let’s dive deeper into each Advance Terrafund REIT owner type, starting with the chart below.

Check out our latest analysis for Advance Terrafund REIT

BUL:ATER ownership breakdown May 31, 2022

What Does Institutional Ownership Tell Us About the Advance Terrafund REIT?

Institutional investors typically compare their own returns to the returns of a commonly tracked index. As such, they typically consider buying larger companies that are included in the relevant benchmark index.

We can see that Advance Terrafund REIT has institutional investors; and they hold a good portion of the company’s stock. This suggests some credibility among professional investors. But we can’t rely on that alone, as institutions sometimes make bad investments, just like everyone else. When multiple institutions own a stock, there is always a risk that they will find themselves in a “crowded trade”. When such a trade goes awry, multiple parties can compete to sell shares quickly. This risk is higher in a company without a growth history. You can see Advance Terrafund REIT’s historical earnings and earnings below, but remember there’s still more to be told.

Profit and Revenue Growth
BUL:ATER earnings and revenue growth May 31, 2022

We find that hedge funds have no wise investment in Advance Terrafund REIT. Looking at our data, we can see that the largest shareholder is Stanimir Karolev with 33% of the shares outstanding. In comparison, the second- and third-largest shareholders hold around 32% and 6.6% of the shares, respectively.

To make our study more interesting, we found that the top 2 shareholders hold controlling stakes in the company, meaning they are powerful enough to influence the company’s decisions.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiment to know which way the wind is blowing. As far as we can tell, there’s no analyst coverage on the company, so it’s likely flying under the radar.

Insider ownership of Advance Terrafund REIT

While the precise definition of an insider can be subjective, almost everyone considers a board member to be an insider. The management of the company is accountable to the board of directors, which should represent the interests of the shareholders. It is noteworthy that sometimes high-ranking managers themselves sit on the board.

Insider ownership is positive when it signals leadership thinks like the true owners of the company. However, high levels of insider ownership can give immense power to even a small group within the organization. This can sometimes be negative.

Our latest data shows that insiders own a fair share of Advance Terrafund REIT. Insiders own £84million of shares in the £251million company. We’d say this shows the focus on shareholders, but it’s worth noting that the company is still quite small; Some insiders may have started the company. You can click here to see if these Insiders have bought or sold.

General Public Property

The general public, which are typically retail investors, own a 26% stake in Advance Terrafund REIT. While this ownership may not be sufficient to influence a policy decision in their favor, they can still collectively influence company policy.

Next Steps:

While it’s worth considering the different groups that own a business, there are other factors that are even more important. For example, we discovered 3 warning signs for Advance Terrafund REIT (1 makes us a little awkward!) What you should know before investing here.

Of course This might not be the best stock to buy. So you might want to see ours free Collection of interesting prospects with favorable financial data.

Note: The figures in this article are calculated using data for the last twelve months, relating to the 12-month period ending on the last date of the month to which the financial statements are dated. This may not tally with the annual report figures for the full year.

This Simply Wall St article is of a general nature. We provide comments based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your goals or financial situation. Our goal is to offer you long-term focused analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.

About Paige McCarthy

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