Sembcorp Industries Ltd (SGX:U96) stock most popular amongst private equity firms who own 50%, while individual investors hold 33%
Key Insights
-
The considerable ownership by private equity firms in Sembcorp Industries indicates that they collectively have a greater say in management and business strategy
-
Temasek Holdings (Private) Limited owns 50% of the company
To get a sense of who is truly in control of Sembcorp Industries Ltd ( SGX:U96 ), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are private equity firms with 50% 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 33% of the company's stockholders.
Let's delve deeper into each type of owner of Sembcorp Industries, beginning with the chart below.
Check out our latest analysis for Sembcorp Industries
What Does The Institutional Ownership Tell Us About Sembcorp Industries?
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.
As you can see, institutional investors have a fair amount of stake in Sembcorp Industries. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Sembcorp Industries' earnings history below. Of course, the future is what really matters.
Sembcorp Industries is not owned by hedge funds. Temasek Holdings (Private) Limited is currently the company's largest shareholder with 50% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Capital Research and Management Company is the second largest shareholder owning 4.8% of common stock, and The Vanguard Group, Inc. holds about 2.1% of the company stock.
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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Sembcorp Industries
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
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.
Our most recent data indicates that insiders own some shares in Sembcorp Industries Ltd. The insiders have a meaningful stake worth S$124m. Most would say this shows a good alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.
General Public Ownership
The general public-- including retail investors -- own 33% 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 50%, 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:
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 - Sembcorp Industries has 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company .
Have feedback on this article? Concerned about the content? Get in touch
with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
