Yahoo Finance TPG Telecom Limited's (ASX:TPG) stock price dropped 3.7% last week; public companies would not be happy
Key Insights
TPG Telecom's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
52% of the business is held by the top 3 shareholders
To get a sense of who is truly in control of TPG Telecom Limited (ASX:TPG), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 35% to be precise, is public companies. Put another way, the group faces the maximum upside potential (or downside risk).
As market cap fell to AU$9.2b last week, public companies would have faced the highest losses than any other shareholder groups of the company.
Let's take a closer look to see what the different types of shareholders can tell us about TPG Telecom.
View our latest analysis for TPG Telecom
What Does The Institutional Ownership Tell Us About TPG Telecom?
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 TPG Telecom does have institutional investors; and they hold a good portion of the company's stock. 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 TPG Telecom's earnings history below. Of course, the future is what really matters.
Hedge funds don't have many shares in TPG Telecom. The company's largest shareholder is Vodafone Hutchison (Australia) Holdings Limted, with ownership of 28%. Washington H. Soul Pattinson and Company Limited is the second largest shareholder owning 13% of common stock, and CK Hutchison Holdings Limited holds about 11% of the company stock.
A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of TPG Telecom
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. 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.
Our most recent data indicates that insiders own a reasonable proportion of TPG Telecom Limited. Insiders own AU$923m worth of shares in the AU$9.2b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.
General Public Ownership
The general public, who are usually individual investors, hold a 20% stake in TPG Telecom. 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.
Private Company Ownership
It seems that Private Companies own 28%, of the TPG Telecom stock. 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.
Public Company Ownership
It appears to us that public companies own 35% of TPG Telecom. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 2 warning signs for TPG Telecom you should be aware of, and 1 of them is a bit concerning.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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