Could CapitaLand Mall Trust’s (SGX:C38U) Investor Composition Influence The Stock Price?

The big shareholder groups in CapitaLand Mall Trust (SGX:C38U) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. We also tend to see lower insider ownership in companies that were previously publicly owned.

CapitaLand Mall Trust is a pretty big company. It has a market capitalization of S$6.9b. Normally institutions would own a significant portion of a company this size. In the chart below, we can see that institutions own shares in the company. Let’s take a closer look to see what the different types of shareholder can tell us about CapitaLand Mall Trust.

See our latest analysis for CapitaLand Mall Trust

SGX:C38U Ownership Summary May 28th 2020
SGX:C38U Ownership Summary May 28th 2020

What Does The Institutional Ownership Tell Us About CapitaLand Mall Trust?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors own 29% of CapitaLand Mall Trust. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 CapitaLand Mall Trust, (below). Of course, keep in mind that there are other factors to consider, too.

SGX:C38U Income Statement May 28th 2020
SGX:C38U Income Statement May 28th 2020

We note that hedge funds don’t have a meaningful investment in CapitaLand Mall Trust. The company’s largest shareholder is CLA Real Estate Holdings Pte. Ltd, with ownership of 27%, Next, we have BlackRock, Inc. and NTUC Enterprise Co-operative Limited as the second and third largest shareholders, holding 6.0% and 3.7%, of the shares outstanding, respectively.

Additionally, we found that the top 14 have the combined ownership of 50% in the company, suggesting that no one share holder has significant control over 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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of CapitaLand Mall Trust

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 CapitaLand Mall Trust. But they may have an indirect interest through a corporate structure that we haven’t picked up on. It’s a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own S$1.9m worth of shares. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public holds a 41% stake in C38U. 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

It seems that Private Companies own 31%, of the C38U stock. 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 CapitaLand Mall Trust better, we need to consider many other factors. For example, we’ve discovered 3 warning signs for CapitaLand Mall Trust (1 is potentially serious!) that you should be aware of before investing here.

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.

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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. Thank you for reading.