Yahoo Finance Institutional investors have a lot riding on Millicom International Cellular S.A. (NASDAQ:TIGO) with 47% ownership
Key Insights
Significantly high institutional ownership implies Millicom International Cellular's stock price is sensitive to their trading actions
The top 5 shareholders own 53% of the company
Every investor in Millicom International Cellular S.A. (NASDAQ:TIGO) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 47% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And as as result, institutional investors reaped the most rewards after the company's stock price gained 3.8% last week. The one-year return on investment is currently 12% and last week's gain would have been more than welcomed.
Let's take a closer look to see what the different types of shareholders can tell us about Millicom International Cellular.
View our latest analysis for Millicom International Cellular
What Does The Institutional Ownership Tell Us About Millicom International Cellular?
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.
We can see that Millicom International Cellular does have institutional investors; and they hold a good portion of the company's 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. 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 Millicom International Cellular's earnings history below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in Millicom International Cellular. Looking at our data, we can see that the largest shareholder is Xavier Niel with 29% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.1% and 5.8%, of the shares outstanding, respectively.
To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.
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 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 Millicom International Cellular
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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.
It seems insiders own a significant proportion of Millicom International Cellular S.A.. It is very interesting to see that insiders have a meaningful US$1.0b stake in this US$3.5b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.
General Public Ownership
The general public, who are usually individual investors, hold a 23% stake in Millicom International Cellular. 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.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Millicom International Cellular you should know about.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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.
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.
