With 1.0% one-year returns, institutional owners may ignore SG Holdings Co.,Ltd.'s (TSE:9143) 5.0% stock price decline
Key Insights
- Institutions' substantial holdings in SG HoldingsLtd implies that they have significant influence over the company's share price
- A total of 9 investors have a majority stake in the company with 52% ownership
- Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock
A look at the shareholders of SG Holdings Co.,Ltd. (TSE:9143) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 34% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Institutional investors endured the highest losses after the company's market cap fell by JP¥46b last week. However, the 1.0% one-year return to shareholders might have softened the blow. But they would probably be wary of future losses.
Let's take a closer look to see what the different types of shareholders can tell us about SG HoldingsLtd.
View our latest analysis for SG HoldingsLtd
What Does The Institutional Ownership Tell Us About SG HoldingsLtd?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
SG HoldingsLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see SG HoldingsLtd's historic earnings and revenue below, but keep in mind there's always more to the story.
We note that hedge funds don't have a meaningful investment in SG HoldingsLtd. Our data shows that Shinsei Kosan Co., Ltd. is the largest shareholder with 18% of shares outstanding. SGH Culture and Sports Promotion Foundation is the second largest shareholder owning 8.0% of common stock, and Sumitomo Life Insurance Company holds about 4.2% of the company stock.
We also observed that the top 9 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of SG HoldingsLtd
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our data suggests that insiders own under 1% of SG Holdings Co.,Ltd. in their own names. However, it's possible that insiders might have an indirect interest through a more complex structure. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around JP¥1.1b worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.
General Public Ownership
The general public, who are usually individual investors, hold a 29% stake in SG HoldingsLtd. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Private Company Ownership
It seems that Private Companies own 25%, of the SG HoldingsLtd stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Public Company Ownership
It appears to us that public companies own 3.3% of SG HoldingsLtd. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand SG HoldingsLtd better, we need to consider many other factors. Be aware that SG HoldingsLtd is showing 1 warning sign in our investment analysis , you should know about...
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.