NetLink NBN Trust (SGX:CJLU) surges 3.1%; individual investors who own 48% shares profited along with institutions

Key Insights

• Significant control over NetLink NBN Trust by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 17 investors have a majority stake in the company with 50% ownership
• Institutional ownership in NetLink NBN Trust is 27%

If you want to know who really controls NetLink NBN Trust (SGX:CJLU), then you'll have to look at the makeup of its share registry. We can see that individual investors own the lion's share in the company with 48% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Individual investors gained the most after market cap touched S$3.3b last week, while institutions who own 27% also benefitted.

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

View our latest analysis for NetLink NBN Trust

What Does The Institutional Ownership Tell Us About NetLink NBN Trust?

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.

As you can see, institutional investors have a fair amount of stake in NetLink NBN 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 NetLink NBN Trust, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in NetLink NBN Trust. Looking at our data, we can see that the largest shareholder is Singapore Telecommunications Limited with 25% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.9% and 5.0% of the stock.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 17 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 NetLink NBN Trust

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 information suggests that NetLink NBN Trust insiders own under 1% of the company. 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 S$11m worth of shares (at current prices). 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, who are usually individual investors, hold a 48% stake in NetLink NBN Trust. 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 25% of NetLink NBN Trust. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

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. For example, we've discovered 1 warning sign for NetLink NBN Trust that you should be aware of before investing here.

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.

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

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.