Key Insights

• The considerable ownership by retail investors in NetLink NBN Trust indicates that they collectively have a greater say in management and business strategy
• The top 17 shareholders own 50% of the company
• 27% of NetLink NBN Trust is held by Institutions

To get a sense of who is truly in control of NetLink NBN Trust (SGX:CJLU), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 48% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 3.1% increase in the stock price last week, retail investors profited the most, but institutions who own 27% stock also stood to gain from the increase.

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

See our latest analysis for NetLink NBN Trust

What Does The Institutional Ownership Tell Us About NetLink NBN Trust?

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.

We can see that NetLink NBN Trust 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 NetLink NBN Trust's historic earnings and revenue below, but keep in mind there's always more to the story.

NetLink NBN Trust is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Singapore Telecommunications Limited with 25% of shares outstanding. With 6.9% and 5.0% of the shares outstanding respectively, M&G Investment Management Limited and PPM America, Inc. are the second and third largest shareholders.

After doing some more digging, we found that the top 17 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over 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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of NetLink NBN Trust

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. 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.

Our information suggests that NetLink NBN Trust insiders own under 1% of the company. Keep in mind that it's a big company, and the insiders own S$11m worth of shares. The absolute value might be more important than the proportional share. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 48% stake in the company, and hence can't easily be ignored. 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.

Public Company Ownership

We can see that public companies hold 25% of the NetLink NBN Trust shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand NetLink NBN Trust better, we need to consider many other factors. Take risks for example - NetLink NBN Trust has 1 warning sign we think you should be aware of.

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.