With 46% ownership in GDS Holdings Limited (NASDAQ:GDS), institutional investors have a lot riding on the business

Key Insights

• Significantly high institutional ownership implies GDS Holdings' stock price is sensitive to their trading actions
• A total of 8 investors have a majority stake in the company with 52% ownership
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of GDS Holdings Limited (NASDAQ:GDS) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 46% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Last week’s 14% gain means that institutional investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. One-year return to shareholders is currently 365% and last week’s gain was the icing on the cake.

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

View our latest analysis for GDS Holdings

What Does The Institutional Ownership Tell Us About GDS Holdings?

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.

As you can see, institutional investors have a fair amount of stake in GDS Holdings. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 GDS Holdings' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in GDS Holdings. Our data shows that STT GDC Pte. Ltd. is the largest shareholder with 31% of shares outstanding. The second and third largest shareholders are Wei Huang and Baron Capital Group, Inc., with an equal amount of shares to their name at 3.5%. Wei Huang, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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

Insider Ownership Of GDS Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

We can see that insiders own shares in GDS Holdings Limited. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around US$248m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 20% stake in GDS Holdings. 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.

Private Company Ownership

We can see that Private Companies own 31%, of the shares on issue. 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 GDS Holdings better, we need to consider many other factors. For example, we've discovered 2 warning signs for GDS Holdings 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.

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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.