Key Insights
With high institutional ownership, Apollo Commercial Real Estate Finance's share price could be affected by their trading decisions.
The top 15 shareholders own 50% of the company.
Recent insider sales
Investors in Apollo Commercial Real Estate Finance, Inc. (NYSE:ARI) should be aware of the most powerful shareholder groups. And the group with the largest shareholding is institutional investors, with 58% ownership. This means that this group stands to gain the most if the share price rises, and lose the most if the share price falls.
With vast amounts of capital and research capability at their disposal, institutional ownership tends to carry a lot of influence, especially among retail investors. As a result, having large amounts of institutional capital invested in a company is generally seen as a positive attribute.
In the chart below, we can zoom in on the different ownership groups at Apollo Commercial Real Estate Finance.
Check out our latest analysis for Apollo Commercial Real Estate Finance
Ownership Breakdown
What does institutional ownership tell us about Apollo Commercial Real Estate Finance?
Institutions typically compare their own performance against a benchmark when reporting to their own investors, so when a stock is included in a major index, they often increase their interest in that stock. You can expect most companies to have some institutional investors on the register, especially if they are growing.
As you can see, institutional investors have a fair amount of stake in Apollo Commercial Real Estate Finance. This means that the analysts working for these institutions have looked at the stock and they like it. However, just like everyone else, the analysts can be wrong. When multiple institutions own a stock, there's always a risk that it can get caught in a 'crowded trade'. If such a trade goes wrong, multiple parties could compete to sell shares fast. This risk is higher in companies without a history of growth. You can see Apollo Commercial Real Estate Finance's historic earnings and revenue below, but remember there's always more to the story.
Revenue and income growth
Since institutional investors own more than half of the shares outstanding, the board of directors will likely need to take their preferences into consideration. We note that hedge funds don't have a significant investment in Apollo Commercial Real Estate Finance. The company's largest shareholder is BlackRock Inc., owning 16%. Vanguard Group Inc. and QH RE Asset Company Inc. are the second and third largest shareholders, owning 11% and 5.9% of the shares outstanding, respectively.
A closer look at the ownership figures shows that the top 15 shareholders hold a combined ownership of 50% with no single shareholder holding the majority.
The story continues
While studying institutional ownership for a company can add value to your research, it is also a good idea to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a fair number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Apollo Commercial Real Estate Finance Insider Ownership
The definition of an insider varies slightly between countries, but members of the board of directors always qualify. While a company's management runs the business, the CEO is accountable to the board, even if he or she is a member of the board.
While most view insider ownership as a positive because it can indicate the board is well aligned with other shareholders, in some cases it can lead to too much power being concentrated in one group.
Our most recent data indicates that insiders own less than 1% of Apollo Commercial Real Estate Finance, Inc. shares. However, it's possible that insiders have an indirect interest through more complex structures. Because it's a large company, even a small percentage interest would create a board and shareholder agreement. In this case, insiders own US$9.3m worth of shares. It's good to see directors owning shares, but it might be worth checking if insiders have been buying shares.
General public property
The general public, usually retail investors, own 36% of Apollo Commercial Real Estate Finance Co., Ltd. While this size of ownership may not be enough to tilt policy decisions in their favour, they can still exert a collective influence on company policies.
Private Ownership
Our data indicates that private companies hold 5.9% of the company's shares. Private companies may be related parties; insiders may have an interest in public companies through holdings in private companies, rather than in their own capacity as individuals. It is difficult to draw any broad strokes conclusions, but it is an area worth noting for further investigation.
Next steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important to consider: risk, for example: Apollo Commercial Real Estate Finance has 2 warning signs you should know about.
Ultimately, the future is what matters most, so you can access this free report on analyst forecasts for the company.
Note: The figures in this article are calculated using data from the last 12 months, which refers to the 12-month period ending on the last day of the month in which the financial statements are dated, which may not match the figures in the annual report.
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This article by Simply Wall St is of general nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology, and our articles are not intended as financial advice. It is not a recommendation to buy or sell a stock, and does not take into account your objectives or financial situation. We aim to provide long-term analysis driven by fundamental data. Please 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 herein.