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Could Zhongmin Baihui Retail Group Ltd.'s (SGX:5SR) Investor Composition Influence The Stock Price?

Simply Wall St

The big shareholder groups in Zhongmin Baihui Retail Group Ltd. (SGX:5SR) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

Zhongmin Baihui Retail Group is not a large company by global standards. It has a market capitalization of S$150m, which means it wouldn't have the attention of many institutional investors. In the chart below below, we can see that institutions are not on the share registry. Let's delve deeper into each type of owner, to discover more about 5SR.

See our latest analysis for Zhongmin Baihui Retail Group

SGX:5SR Ownership Summary, October 15th 2019

What Does The Lack Of Institutional Ownership Tell Us About Zhongmin Baihui Retail Group?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to fund under management, so the institition does not bother to look closely at the company. Alternatively, there might be something about the company that has kept institutional investors away. Zhongmin Baihui Retail Group might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

SGX:5SR Income Statement, October 15th 2019

Hedge funds don't have many shares in Zhongmin Baihui Retail Group. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Zhongmin Baihui Retail Group

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

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 most recent data indicates that insiders own the majority of Zhongmin Baihui Retail Group Ltd.. This means they can collectively make decisions for the company. That means they own S$116m worth of shares in the S$150m company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public holds a 19% stake in 5SR. 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.

Private Company Ownership

Our data indicates that Private Companies hold 3.6%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

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.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.