Key Insights
- Significant control over Singapore Airlines by private equity firms implies that the general public has more power to influence management and governance-related decisions
- The largest shareholder of the company is Temasek Holdings (Private) Limited with a 52% stake
- Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock
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A look at the shareholders of Singapore Airlines Limited (SGX:C6L) can tell us which group is most powerful. We can see that private equity firms own the lion's share in the company with 52% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Individual investors, on the other hand, account for 39% of the company's stockholders.
Let's delve deeper into each type of owner of Singapore Airlines, beginning with the chart below.
What Does The Institutional Ownership Tell Us About Singapore Airlines?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
As you can see, institutional investors have a fair amount of stake in Singapore Airlines. 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. 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 Singapore Airlines, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don't have many shares in Singapore Airlines. The company's largest shareholder is Temasek Holdings (Private) Limited, with ownership of 52%. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. The second and third largest shareholders are BlackRock, Inc. and The Vanguard Group, Inc., with an equal amount of shares to their name at 1.9%.
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 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 Singapore Airlines
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 information suggests that Singapore Airlines Limited insiders own under 1% of the company. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own S$44m of stock. Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 39% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private Equity Ownership
With an ownership of 52%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Singapore Airlines better, we need to consider many other factors. For instance, we've identified 3 warning signs for Singapore Airlines (1 is significant) that you should be aware of.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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.
