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Every investor in Hong Lai Huat Group Limited (SGX:CTO) should be aware of the most powerful shareholder groups. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.’
Hong Lai Huat Group is a smaller company with a market capitalization of S$51m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it’s seems that institutions are not really that prevalent on the share registry. We can zoom in on the different ownership groups, to learn more about CTO.
View our latest analysis for Hong Lai Huat Group
What Does The Institutional Ownership Tell Us About Hong Lai Huat 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.
Less than 5% of Hong Lai Huat Group is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it’s the future that counts most.
Hong Lai Huat Group is not owned by hedge funds. As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of Hong Lai Huat Group
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
It seems insiders own a significant proportion of Hong Lai Huat Group Limited. Insiders have a S$19m stake in this S$51m business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.