Sands China Ltd.'s (HKG:1928) market cap dropped HK$5.1b last week; Public companies bore the brunt

Key Insights

• The considerable ownership by public companies in Sands China indicates that they collectively have a greater say in management and business strategy
• 73% of the company is held by a single shareholder (Las Vegas Sands Corp.)
• Institutional ownership in Sands China is 10%

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Every investor in Sands China Ltd. (HKG:1928) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 73% to be precise, is public companies. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 3.1% decline in share price, public companies suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Sands China.

View our latest analysis for Sands China

What Does The Institutional Ownership Tell Us About Sands China?

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.

Sands China already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Sands China, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Sands China. Las Vegas Sands Corp. is currently the largest shareholder, with 73% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Massachusetts Financial Services Company is the second largest shareholder owning 1.5% of common stock, and The Vanguard Group, Inc. holds about 1.2% of the company stock.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Sands China

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.

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.

We note our data does not show any board members holding shares, personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would 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 16% stake in Sands China. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Public Company Ownership

It appears to us that public companies own 73% of Sands China. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Sands China has 2 warning signs we think 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.

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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.