Sheng Siong Group's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
The top 4 shareholders own 55% of the company
Every investor in Sheng Siong Group Ltd (SGX:OV8) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 34% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And private companies on the other hand have a 30% ownership in the company.
Let's take a closer look to see what the different types of shareholders can tell us about Sheng Siong Group.
What Does The Institutional Ownership Tell Us About Sheng Siong Group?
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.
We can see that Sheng Siong Group does have institutional investors; and they hold a good portion of the company's stock. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Sheng Siong Group, (below). Of course, keep in mind that there are other factors to consider, too.
Sheng Siong Group is not owned by hedge funds. Sheng Siong Holdings Pte. Ltd. is currently the company's largest shareholder with 30% of shares outstanding. Hock Chee Lim is the second largest shareholder owning 9.2% of common stock, and Hock Eng Lim holds about 8.0% of the company stock. Interestingly, the bottom two of the top three shareholders also hold the title of Chief Executive Officer and Chairman of the Board, respectively, suggesting that these insiders have a personal stake in the company.
On looking further, we found that 55% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Sheng Siong Group
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our most recent data indicates that insiders own a reasonable proportion of Sheng Siong Group Ltd. Insiders own S$596m worth of shares in the S$2.3b 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, who are usually individual investors, hold a 34% stake in Sheng Siong Group. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private Company Ownership
We can see that Private Companies own 30%, of the shares on issue. 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.
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Sheng Siong Group has 1 warning sign we think you should be aware of.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.