The considerable ownership by private companies in Jardine Matheson Holdings indicates that they collectively have a greater say in management and business strategy
A total of 4 investors have a majority stake in the company with 53% ownership
To get a sense of who is truly in control of Jardine Matheson Holdings Limited (SGX:J36), it is important to understand the ownership structure of the business. We can see that private companies own the lion's share in the company with 35% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Institutions, on the other hand, account for 32% of the company's stockholders. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.
Let's take a closer look to see what the different types of shareholders can tell us about Jardine Matheson Holdings.
What Does The Institutional Ownership Tell Us About Jardine Matheson Holdings?
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 Jardine Matheson 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. 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 Jardine Matheson Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.
SGX:J36 Earnings and Revenue Growth April 28th 2023
We note that hedge funds don't have a meaningful investment in Jardine Matheson Holdings. The company's largest shareholder is Jardine Strategic Limited, with ownership of 22%. Meanwhile, the second and third largest shareholders, hold 13% and 13%, of the shares outstanding, respectively.
On looking further, we found that 53% of the shares are owned by the top 4 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 Jardine Matheson Holdings
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
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.
Shareholders would probably be interested to learn that insiders own shares in Jardine Matheson Holdings Limited. It is a very large company, and board members collectively own US$902m worth of shares (at current prices). 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 26% stake in Jardine Matheson Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
It seems that Private Companies own 35%, of the Jardine Matheson Holdings stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Jardine Matheson Holdings better, we need to consider many other factors. For example, we've discovered 3 warning signs for Jardine Matheson Holdings that you should be aware of before investing here.
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.
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