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Institutions Along With Individual Investors Who Hold Considerable Shares InDynex Capital, Inc. (NYSE:DX) Come Under Pressure; Lose 8.3% of Holdings Value

Simply Wall St ·  10/23/2023 23:23

Key Insights

  • Dynex Capital's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
  • 42% of the business is held by the top 25 shareholders
  • Institutions own 48% of Dynex Capital

To get a sense of who is truly in control of Dynex Capital, Inc. (NYSE:DX), it is important to understand the ownership structure of the business. With 50% stake, individual investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 8.3% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 48% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of Dynex Capital.

View our latest analysis for Dynex Capital

ownership-breakdown
NYSE:DX Ownership Breakdown October 23rd 2023

What Does The Institutional Ownership Tell Us About Dynex Capital?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Dynex Capital already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Dynex Capital, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NYSE:DX Earnings and Revenue Growth October 23rd 2023

Dynex Capital is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is BlackRock, Inc. with 8.8% of shares outstanding. With 5.3% and 3.1% of the shares outstanding respectively, The Vanguard Group, Inc. and Balyasny Asset Management L.P. are the second and third largest shareholders. In addition, we found that Byron Boston, the CEO has 0.7% of the shares allocated to their name.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Dynex Capital

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

We can report that insiders do own shares in Dynex Capital, Inc.. It has a market capitalization of just US$578m, and insiders have US$9.7m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 50% stake in Dynex Capital, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - Dynex Capital has 4 warning signs (and 2 which are a bit concerning) we think you should know about.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.

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

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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