Stock Analysis

Both public companies who control a good portion of Wynn Macau, Limited (HKG:1128) along with institutions must be dismayed after last week's 6.2% decrease

SEHK:1128
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Key Insights

  • The considerable ownership by public companies in Wynn Macau indicates that they collectively have a greater say in management and business strategy
  • 72% of the company is held by a single shareholder (Wynn Resorts, Limited)
  • Insiders have sold recently

If you want to know who really controls Wynn Macau, Limited (HKG:1128), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 72% to be precise, is public companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While institutions, who own 17% shares weren’t spared from last week’s HK$2.4b market cap drop, public companies as a group suffered the maximum losses

In the chart below, we zoom in on the different ownership groups of Wynn Macau.

View our latest analysis for Wynn Macau

ownership-breakdown
SEHK:1128 Ownership Breakdown June 13th 2024

What Does The Institutional Ownership Tell Us About Wynn Macau?

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 Wynn Macau does have institutional investors; and they hold a good portion of the company's stock. 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 Wynn Macau, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
SEHK:1128 Earnings and Revenue Growth June 13th 2024

Wynn Macau is not owned by hedge funds. Our data shows that Wynn Resorts, Limited is the largest shareholder with 72% of shares outstanding. This implies that they have majority interest control of the future of the company. With 5.7% and 5.5% of the shares outstanding respectively, Capital Research and Management Company and Goldman Sachs Group, Investment Banking and Securities Investments are the second and third largest shareholders.

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 Wynn Macau

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

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 most recent data indicates that insiders own less than 1% of Wynn Macau, Limited. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around HK$83m worth of shares (at current prices). Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 11% stake in the company, and hence can't easily be ignored. 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.

Public Company Ownership

It appears to us that public companies own 72% of Wynn Macau. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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. Take risks for example - Wynn Macau has 3 warning signs (and 2 which shouldn't be ignored) we think you should know about.

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.

Valuation is complex, but we're helping make it simple.

Find out whether Wynn Macau is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.