In This Article:
Key Insights
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Melco Resorts & Entertainment's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
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The top 25 shareholders own 42% of the company
A look at the shareholders of Melco Resorts & Entertainment Limited (NASDAQ:MLCO) can tell us which group is most powerful. We can see that individual investors own the lion's share in the company with 54% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
While the holdings of individual investors took a hit after last week’s 4.7% price drop, institutions with their 39% holdings also suffered.
Let's take a closer look to see what the different types of shareholders can tell us about Melco Resorts & Entertainment.
View our latest analysis for Melco Resorts & Entertainment
What Does The Institutional Ownership Tell Us About Melco Resorts & Entertainment?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
As you can see, institutional investors have a fair amount of stake in Melco Resorts & Entertainment. 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 Melco Resorts & Entertainment's historic earnings and revenue below, but keep in mind there's always more to the story.
We note that hedge funds don't have a meaningful investment in Melco Resorts & Entertainment. Our data shows that Capital Research and Management Company is the largest shareholder with 8.5% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.0% and 6.6%, of the shares outstanding, respectively.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.