Significant insider control over Hock Lian Seng Holdings implies vested interests in company growth
The largest shareholder of the company is Leong Hai Chua with a 60% stake
Using data from company's past performance alongside ownership research, one can better assess the future performance of a company
A look at the shareholders of Hock Lian Seng Holdings Limited (SGX:J2T) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 76% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.
Let's take a closer look to see what the different types of shareholders can tell us about Hock Lian Seng Holdings.
What Does The Lack Of Institutional Ownership Tell Us About Hock Lian Seng Holdings?
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 many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Hock Lian Seng Holdings, for yourself, below.
SGX:J2T Earnings and Revenue Growth November 8th 2024
Hedge funds don't have many shares in Hock Lian Seng Holdings. Our data suggests that Leong Hai Chua, who is also the company's Top Key Executive, holds the most number of shares at 60%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. For context, the second largest shareholder holds about 5.8% of the shares outstanding, followed by an ownership of 5.1% by the third-largest shareholder. Interestingly, the third-largest shareholder, Siok Peng Chua is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.
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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Hock Lian Seng Holdings
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.
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 Hock Lian Seng Holdings Limited. This means they can collectively make decisions for the company. So they have a S$132m stake in this S$174m business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 24% stake in Hock Lian Seng Holdings. 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.
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. For instance, we've identified 1 warning sign for Hock Lian Seng Holdings that you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this freelist of interesting companies.
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.
