Significant control over Hotel Properties by private companies implies that the general public has more power to influence management and governance-related decisions
60% of the business is held by the top 2 shareholders
To get a sense of who is truly in control of Hotel Properties Limited (SGX:H15), it is important to understand the ownership structure of the business. With 58% stake, private companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Individual insiders, on the other hand, account for 31% of the company's stockholders. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.
Let's delve deeper into each type of owner of Hotel Properties, beginning with the chart below.
What Does The Lack Of Institutional Ownership Tell Us About Hotel Properties?
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. 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 Hotel Properties, for yourself, below.
SGX:H15 Earnings and Revenue Growth November 5th 2024
We note that hedge funds don't have a meaningful investment in Hotel Properties. Our data shows that 68 Holdings Pte Ltd. is the largest shareholder with 34% of shares outstanding. In comparison, the second and third largest shareholders hold about 25% and 22% of the stock. Beng Seng Ong, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.
After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of Hotel Properties
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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 information suggests that insiders maintain a significant holding in Hotel Properties Limited. It has a market capitalization of just S$1.9b, and insiders have S$585m worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.
General Public Ownership
With a 11% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Hotel Properties. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
Our data indicates that Private Companies hold 58%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Hotel Properties better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Hotel Properties (of which 1 can't be ignored!) you should know about.
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.
