Do Insiders Own Lots Of Shares In Hotel Properties Limited (SGX:H15)?

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The big shareholder groups in Hotel Properties Limited (SGX:H15) have power over the company. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of 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.'

Hotel Properties isn't enormous, but it's not particularly small either. It has a market capitalization of S$1.8b, which means it would generally expect to see some institutions on the share registry. In the chart below below, we can see that institutions are not on the share registry. Let's delve deeper into each type of owner, to discover more about H15.

Check out our latest analysis for Hotel Properties

SGX:H15 Ownership Summary, August 28th 2019
SGX:H15 Ownership Summary, August 28th 2019

What Does The Lack Of Institutional Ownership Tell Us About Hotel Properties?

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. Hotel Properties's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

SGX:H15 Income Statement, August 28th 2019
SGX:H15 Income Statement, August 28th 2019

Hotel Properties is not owned by hedge funds. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

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. The company management answer to the board; and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board, themselves.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems insiders own a significant proportion of Hotel Properties Limited. It has a market capitalization of just S$1.8b, and insiders have S$526m worth of shares in their own names. That's quite significant. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.