Advertisement
Australia markets closed
  • ALL ORDS

    7,861.00
    -1.30 (-0.02%)
     
  • AUD/USD

    0.6418
    +0.0015 (+0.23%)
     
  • ASX 200

    7,605.60
    -6.90 (-0.09%)
     
  • OIL

    85.05
    -0.31 (-0.36%)
     
  • GOLD

    2,394.70
    -13.10 (-0.54%)
     
  • Bitcoin AUD

    99,097.70
    +45.42 (+0.05%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     

SkyCity Entertainment Group Limited (NZSE:SKC) is largely controlled by institutional shareholders who own 62% of the company

Key Insights

  • Given the large stake in the stock by institutions, SkyCity Entertainment Group's stock price might be vulnerable to their trading decisions

  • 52% of the business is held by the top 6 shareholders

  • Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

A look at the shareholders of SkyCity Entertainment Group Limited (NZSE:SKC) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 62% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.

ADVERTISEMENT

In the chart below, we zoom in on the different ownership groups of SkyCity Entertainment Group.

Check out our latest analysis for SkyCity Entertainment Group

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About SkyCity Entertainment Group?

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 SkyCity Entertainment Group 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. 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 SkyCity Entertainment Group, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
earnings-and-revenue-growth

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. SkyCity Entertainment Group is not owned by hedge funds. Orbis Investment Management Limited is currently the largest shareholder, with 12% of shares outstanding. For context, the second largest shareholder holds about 9.4% of the shares outstanding, followed by an ownership of 8.7% by the third-largest shareholder.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 SkyCity Entertainment Group

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. 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 information suggests that SkyCity Entertainment Group Limited insiders own under 1% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. It has a market capitalization of just NZ$1.4b, and the board has only NZ$3.5m worth of shares in their own names. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

The general public, who are usually individual investors, hold a 29% stake in SkyCity Entertainment Group. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 8.7%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand SkyCity Entertainment Group better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with SkyCity Entertainment Group (including 1 which can't be ignored) .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.