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A look at the shareholders of Frasers Property Limited (SGX:TQ5) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Companies that used to be publicly owned tend to have lower insider ownership.
Frasers Property is a pretty big company. It has a market capitalization of S$4.7b. Normally institutions would own a significant portion of a company this size. Taking a look at the our data on the ownership groups (below), it’s seems that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about TQ5.
Check out our latest analysis for Frasers Property
What Does The Institutional Ownership Tell Us About Frasers Property?
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.
Frasers Property already has institutions on the share registry. Indeed, they own 29% of the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Frasers Property’s historic earnings and revenue, below, but keep in mind there’s always more to the story.
Hedge funds don’t have many shares in Frasers Property. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Frasers Property
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 less than 1% of Frasers Property Limited. But they may have an indirect interest through a corporate structure that we haven’t picked up on. It’s a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own S$9m worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.