Institutional investors in Millicom International Cellular S.A. (NASDAQ:TIGO) see US$241m decrease in market cap last week, although long-term gains have benefitted them.

Key Insights

• Institutions' substantial holdings in Millicom International Cellular implies that they have significant influence over the company's share price
• A total of 5 investors have a majority stake in the company with 51% ownership
• 30% of Millicom International Cellular is held by insiders

A look at the shareholders of Millicom International Cellular S.A. (NASDAQ:TIGO) can tell us which group is most powerful. With 43% stake, institutions possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Institutional investors was the group most impacted after the company's market cap fell to US$4.0b last week. However, the 43% one-year return to shareholders may have helped lessen their pain. We would assume however, that they would be on the lookout for weakness in the future.

In the chart below, we zoom in on the different ownership groups of Millicom International Cellular.

View our latest analysis for Millicom International Cellular

What Does The Institutional Ownership Tell Us About Millicom International Cellular?

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 Millicom International Cellular does have institutional investors; and they hold a good portion of the company's stock. 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 Millicom International Cellular's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Millicom International Cellular. Our data shows that Xavier Niel is the largest shareholder with 29% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.1% and 5.8%, of the shares outstanding, respectively.

On looking further, we found that 51% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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 Millicom International Cellular

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.

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.

It seems insiders own a significant proportion of Millicom International Cellular S.A.. It is very interesting to see that insiders have a meaningful US$1.2b stake in this US$4.0b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 27% stake in Millicom International Cellular. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Millicom International Cellular (at least 1 which makes us a bit uncomfortable) , and understanding them should be part of your investment process.

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.

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