Every investor in Tencent Holdings Limited $TENCENT(00700)$ should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 40% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
As a result, individual investors as a group endured the highest losses last week after market cap fell by HK$259b.
Let's take a closer look to see what the different types of shareholders can tell us about Tencent Holdings.
What Does The Institutional Ownership Tell Us About Tencent 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 Tencent Holdings. 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 Tencent Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.Tencent Holdings is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Naspers Limited with 29% of shares outstanding. With 7.5% and 2.5% of the shares outstanding respectively, Huateng Pony Ma and The Vanguard Group, Inc. are the second and third largest shareholders. Huateng Pony Ma, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.
A closer look at our ownership figures suggests that the top 20 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.
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 Tencent Holdings
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
We can report that insiders do own shares in Tencent Holdings Limited. The insiders have a meaningful stake worth HK$249b. It is good to see this level of investment.
General Public Ownership
The general public, who are usually individual investors, hold a 40% stake in Tencent Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Public Company Ownership
It appears to us that public companies own 29% of Tencent Holdings. 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.
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