Individual investors account for 48% of Singapore Airlines Limited's (SGX:C6L) ownership, while private equity firms account for 45%

Simply Wall St · 10/19 01:28

Key Insights

  • The considerable ownership by individual investors in Singapore Airlines indicates that they collectively have a greater say in management and business strategy
  • The top 13 shareholders own 50% of the company
  • Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

Every investor in Singapore Airlines Limited (SGX:C6L) should be aware of the most powerful shareholder groups. With 48% stake, individual investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And private equity firms on the other hand have a 45% ownership in the company.

In the chart below, we zoom in on the different ownership groups of Singapore Airlines.

See our latest analysis for Singapore Airlines

ownership-breakdown
SGX:C6L Ownership Breakdown October 19th 2024

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.

We can see that Singapore Airlines does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Singapore Airlines' historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
SGX:C6L Earnings and Revenue Growth October 19th 2024

Hedge funds don't have many shares in Singapore Airlines. Temasek Holdings (Private) Limited is currently the largest shareholder, with 45% of shares outstanding. The Vanguard Group, Inc. is the second largest shareholder owning 1.5% of common stock, and BlackRock, Inc. holds about 1.2% of the company stock.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 13 shareholders, meaning that no single shareholder has a majority interest in the ownership.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

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. 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 most recent data indicates that insiders own less than 1% of Singapore Airlines Limited. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own S$52m worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 48% 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 45%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

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 2 warning signs for Singapore Airlines (1 can't be ignored) that you should be aware of.

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.