Sembcorp Industries Ltd (SGX:U96) stock most popular amongst private equity firms who own 50%, while individual investors hold 33%

Key Insights

• Sembcorp Industries' significant private equity firms ownership suggests that the key decisions are influenced by shareholders from the larger public
• Temasek Holdings (Private) Limited owns 50% of the company
• Institutional ownership in Sembcorp Industries is 16%

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Every investor in Sembcorp Industries Ltd (SGX:U96) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private equity firms with 50% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And individual investors on the other hand have a 33% ownership in the company.

Let's delve deeper into each type of owner of Sembcorp Industries, beginning with the chart below.

View our latest analysis for Sembcorp Industries

What Does The Institutional Ownership Tell Us About Sembcorp Industries?

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.

We can see that Sembcorp Industries does have institutional investors; and they hold a good portion of the company's stock. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Sembcorp Industries' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Sembcorp Industries. Temasek Holdings (Private) Limited is currently the largest shareholder, with 50% of shares outstanding. This implies that they have majority interest control of the future of the company. With 4.7% and 2.0% of the shares outstanding respectively, Capital Research and Management Company and The Vanguard Group, Inc. are the second and third largest shareholders.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Sembcorp Industries

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

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 some shares in Sembcorp Industries Ltd. It is a very large company, and board members collectively own S$127m worth of shares (at current prices). we sometimes take an interest in whether they have been buying or selling.

General Public Ownership

With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sembcorp Industries. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 50% stake in Sembcorp Industries. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Sembcorp Industries you should be aware of, and 1 of them is potentially serious.

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.