What types of shareholders own Sinotrans Limited (HKG: 598)?
If you want to know who really controls Sinotrans Limited (HKG: 598), then you will have to look at the makeup of its share register. Insiders often own a large portion of younger and smaller companies, while larger companies tend to have institutions as shareholders. Companies that were previously owned by the state tend to have fewer insiders.
Sinotrans has a market cap of HK $ 44 billion, so it’s too big to go unnoticed. We expect institutions and retail investors to own a portion of the company. Our analysis of company ownership, below, shows that institutional investors bought the company. We can zoom in on the different property groups, to find out more about Sinotrans.
See our latest review for Sinotrans
What does institutional ownership tell us about Sinotrans?
Many institutions measure their performance against an index that approximates the local market. Thus, they generally pay more attention to companies that are included in the major indices.
We can see that Sinotrans has institutional investors; and they own a good portion of the company’s shares. This implies that analysts working for these institutions have reviewed the action and appreciate it. But like everyone else, they could be wrong. When several institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes awry, several parties may compete with each other to sell stocks quickly. This risk is higher in a company without a history of growth. You can see Sinotrans historical revenue and revenue below, but keep in mind that there is always more to tell.
We note that the hedge funds do not have a significant investment in Sinotrans. China Merchants Group Limited is currently the largest shareholder, with 55% of the shares outstanding. Essentially, this means that they have considerable influence, if not absolute control, over the future of the business. Meanwhile, the second and third largest shareholders hold 6.0% and 2.3% of the outstanding shares, respectively.
Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be achieved by studying the feelings of analysts. There are a lot of analysts covering the stock, so you can look at expected growth quite easily.
Sinotrans Insider Property
The definition of an insider may differ slightly from country to country, but board members still count. The management ultimately reports to the board of directors. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.
Insider ownership is positive when it indicates that executives think like the real owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
Our information suggests that insiders of Sinotrans Limited own less than 1% of the company. We note, however, that it is possible that insiders may have an indirect interest through a private company or other corporate structure. Keep in mind that this is a large company and insiders own shares worth HK $ 83million. The absolute value can be more important than the proportional part. Arguably recent purchases and sales are equally important to consider. You can click here to see if any insiders have bought or sold.
General public property
The general public has a 23% stake in Sinotrans. While this group cannot necessarily take the lead, it can certainly have a real influence on how the business is run.
Owned by a private company
Our data indicates that private companies own 56% of the company’s shares. It may be worth pursuing the question further. If related parties, such as insiders, have an interest in any of these private companies, this should be disclosed in the annual report. Private companies may also have a strategic interest in the business.
It’s always worth thinking about the different groups that own shares in a company. But to better understand Sinotrans, there are many other factors that we need to take into account. Consider, for example, the ever-present specter of investment risk. We have identified 2 warning signs with Sinotrans, and understanding them should be part of your investment process.
If you’d rather find out what analysts are predicting in terms of future growth, don’t miss this free analyst forecast report.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last day of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
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