Key Insights

• MTR's significant state or government ownership suggests that the key decisions are influenced by shareholders from the larger public
• The largest shareholder of the company is Hong Kong with a 75% stake
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls MTR Corporation Limited (HKG:66), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 75% to be precise, is state or government. Put another way, the group faces the maximum upside potential (or downside risk).

Individual investors, on the other hand, account for 20% of the company's stockholders.

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

What Does The Institutional Ownership Tell Us About MTR?

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 MTR. 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 MTR's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in MTR. Our data shows that Hong Kong is the largest shareholder with 75% of shares outstanding. This implies that they have majority interest control of the future of the company. BlackRock, Inc. is the second largest shareholder owning 1.2% of common stock, and The Vanguard Group, Inc. holds about 0.9% of the company stock.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of MTR

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.

Our data suggests that insiders own under 1% of MTR Corporation Limited in their own names. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own HK$118m of stock. 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, who are usually individual investors, hold a 20% stake in MTR. 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.

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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with MTR (at least 1 which doesn't sit too well with us) , and understanding them should be part of your investment process.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.