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Could The Singapore Telecommunications Limited (SGX:Z74) Ownership Structure Tell Us Something Useful?

Simply Wall St

A look at the shareholders of Singapore Telecommunications Limited (SGX:Z74) can tell us which group is most powerful. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Companies that have been privatized tend to have low insider ownership.

With a market capitalization of S$53b, Singapore Telecommunications is rather large. We'd expect to see institutional investors on the register. Companies of this size are usually well known to retail investors, too. Taking a look at our data on the ownership groups (below), it's seems that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about Z74.

Check out our latest analysis for Singapore Telecommunications

SGX:Z74 Ownership Summary, August 26th 2019

What Does The Institutional Ownership Tell Us About Singapore Telecommunications?

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.

We can see that Singapore Telecommunications does have institutional investors; and they hold 18% of the stock. 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 Singapore Telecommunications, (below). Of course, keep in mind that there are other factors to consider, too.

SGX:Z74 Income Statement, August 26th 2019

We note that hedge funds don't have a meaningful investment in Singapore Telecommunications. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Singapore Telecommunications

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 most recent data indicates that insiders own less than 1% of Singapore Telecommunications Limited. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own S$32m of stock. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 30% ownership, the general public have some degree of sway over Z74. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.