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Could The Federal International (2000) Ltd (SGX:BDU) Ownership Structure Tell Us Something Useful?

Every investor in Federal International (2000) Ltd (SGX:BDU) should be aware of the most powerful shareholder groups. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.’

Federal International (2000) is a smaller company with a market capitalization of S$38m, so it may still be flying under the radar of many institutional investors. Taking a look at the our data on the ownership groups (below), it’s seems that institutional investors have not yet purchased shares. We can zoom in on the different ownership groups, to learn more about BDU.

View our latest analysis for Federal International (2000)

SGX:BDU Ownership Summary December 12th 18

What Does The Lack Of Institutional Ownership Tell Us About Federal International (2000)?

We don’t tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it’s not particularly common.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don’t attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. Federal International (2000) might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

SGX:BDU Income Statement Export December 12th 18

Federal International (2000) is not owned by hedge funds. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Federal International (2000)

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

It seems insiders own a significant proportion of Federal International (2000) Ltd. Insiders have a S$16m stake in this S$38m business. I would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public — mostly retail investors — own 58% of Federal International (2000) . This size of ownership gives retail investors collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand Federal International (2000) better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free .

If you would prefer check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, backed by strong financial data.

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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.