Australia markets close in 1 hour 1 minute
  • ALL ORDS

    7,590.30
    -100.40 (-1.31%)
     
  • ASX 200

    7,285.50
    -98.70 (-1.34%)
     
  • AUD/USD

    0.7306
    +0.0017 (+0.24%)
     
  • OIL

    76.09
    +0.64 (+0.85%)
     
  • GOLD

    1,751.20
    -0.80 (-0.05%)
     
  • BTC-AUD

    58,328.70
    -2,535.01 (-4.17%)
     
  • CMC Crypto 200

    1,055.13
    -46.39 (-4.21%)
     
  • AUD/EUR

    0.6240
    +0.0016 (+0.25%)
     
  • AUD/NZD

    1.0398
    +0.0017 (+0.16%)
     
  • NZX 50

    13,174.38
    -53.32 (-0.40%)
     
  • NASDAQ

    15,204.83
    -124.85 (-0.81%)
     
  • FTSE

    7,063.40
    +11.92 (+0.17%)
     
  • Dow Jones

    34,869.37
    +71.37 (+0.21%)
     
  • DAX

    15,573.88
    +42.13 (+0.27%)
     
  • Hang Seng

    24,561.75
    +352.97 (+1.46%)
     
  • NIKKEI 225

    30,145.25
    -94.81 (-0.31%)
     

Is Sunland Group Limited's (ASX:SDG) Shareholder Ownership Skewed Towards Insiders?

  • Oops!
    Something went wrong.
    Please try again later.
·4-min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

The big shareholder groups in Sunland Group Limited (ASX:SDG) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

Sunland Group is not a large company by global standards. It has a market capitalization of AU$326m, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about Sunland Group.

Check out our latest analysis for Sunland Group

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Sunland 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.

As you can see, institutional investors have a fair amount of stake in Sunland Group. 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. 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 Sunland Group's historic earnings and revenue below, but keep in mind there's always more to the story.

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

We note that hedge funds don't have a meaningful investment in Sunland Group. Havannah Pty Ltd. is currently the company's largest shareholder with 22% of shares outstanding. In comparison, the second and third largest shareholders hold about 16% and 6.7% of the stock. Two of the top three shareholders happen to be Top Key Executive and Member of the Board of Directors, respectively. That is, insiders feature higher up in the heirarchy of the company's top shareholders.

On looking further, we found that 51% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Sunland 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. 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 information suggests that insiders maintain a significant holding in Sunland Group Limited. Insiders have a AU$85m stake in this AU$326m business. I would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 31% ownership, the general public have some degree of sway over Sunland Group. 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 Company Ownership

Our data indicates that Private Companies hold 29%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 3 warning signs for Sunland Group you should be aware of.

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.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting