Both private companies who control a good portion of Galaxy Entertainment Group Limited (HKG:27) along with institutions must be dismayed after last week's 5.9% decrease

Key Insights

• Significant control over Galaxy Entertainment Group by private companies implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 5 shareholders
• Institutions own 34% of Galaxy Entertainment Group

If you want to know who really controls Galaxy Entertainment Group Limited (HKG:27), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private companies with 38% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of private companies took a hit after last week’s 5.9% price drop, institutions with their 34% holdings also suffered.

Let's delve deeper into each type of owner of Galaxy Entertainment Group, beginning with the chart below.

Check out our latest analysis for Galaxy Entertainment Group

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

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.

Galaxy Entertainment Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Galaxy Entertainment Group's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Galaxy Entertainment Group. Lui Family Trust is currently the company's largest shareholder with 29% of shares outstanding. With 8.0% and 6.8% of the shares outstanding respectively, Capital Research and Management Company and Lui Che Woo Foundation Limited, Endowment Arm are the second and third largest shareholders.

Our research also brought to light the fact that roughly 51% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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 Galaxy Entertainment Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Shareholders would probably be interested to learn that insiders own shares in Galaxy Entertainment Group Limited. It is a very large company, and board members collectively own HK$3.8b worth of shares (at current prices). Most would say this shows a good alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 25% stake in Galaxy Entertainment 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 38%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Galaxy Entertainment Group better, we need to consider many other factors.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.