In this article, I will take a quick look at Sunlands Online Education Group’s (NYSE:STG) recent ownership structure – an unconventional investing subject, but an important one. A company’s ownership structure is often linked to its share performance in both the long- and short-term. Since the effect of an active institutional investor with a similar ownership as a passive pension-fund can be vastly different on a company’s corporate governance and accountability of shareholders, investors should take a closer look at STG’s shareholder registry.
See our latest analysis for Sunlands Online Education Group
Institutional Ownership
Institutional investors transact in large blocks which can influence the momentum of stock prices, at least in the short-term, especially when there is a low level of public shares available on the market to trade. STG hardly has any institutional ownership, leaving investors little to think about sharp price volatility in the stock that could take place due to institutional trading.
General Public Ownership
The general public holds a substantial 98.80% stake in STG, making it a highly popular stock among retail investors. This size of ownership gives retail investors collective power in deciding on major policy decisions such as executive compensation, appointment of directors and acquisitions of businesses. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and potential acquisitions. This is a positive sign for an investor who wants to be involved in key decision-making of the company.
Private Company Ownership
Another important group of owners for potential investors in STG are private companies that hold a stake of 0.40% in STG. These are companies that are mainly invested due to their strategic interests or are incentivized by reaping capital gains on investments their shareholdings. However, an ownership of this size may be relatively insignificant, meaning that these shareholders may not have the potential to influence STG’s business strategy. Thus, investors not need worry too much about the consequences of these holdings.
Next Steps:
Institutional ownership level and composition in STG is not high nor active enough to significantly impact its investment thesis. However, if you are building an investment case for STG, ownership structure alone should not dictate your decision to buy or sell the stock. Rather, you should be examining fundamental factors such as the intrinsic valuation, which is a key driver of Sunlands Online Education Group’s share price. I urge you to complete your research by taking a look at the following: