What Kind Of Shareholders Own Low Keng Huat (Singapore) Limited (SGX:F1E)?

Simply Wall St.

Fri, Nov 2, 2018, 8:37 PM

If you want to know who really controls Low Keng Huat (Singapore) Limited (SGX:F1E), then you’ll have to look at the makeup of its share registry. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Warren Buffett said that he likes ‘a business with enduring competitive advantages that is run by able and owner-oriented people’. So it’s nice to see some insider ownership, because it may suggest that management is owner-oriented.

Low Keng Huat (Singapore) is not a large company by global standards. It has a market capitalization of S$406m, which means it wouldn’t have the attention of many institutional investors. Taking a look at the our data on the ownership groups (below), it’s seems that institutions don’t own shares in the company. Let’s delve deeper into each type of owner, to discover more about F1E.

View our latest analysis for Low Keng Huat (Singapore)

SGX:F1E Ownership Summary November 3rd 18

What Does The Lack Of Institutional Ownership Tell Us About Low Keng Huat (Singapore)?

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. On the other hand, it’s always possible that professional investors are avoiding a company because they don’t think it’s the best place for their money. Low Keng Huat (Singapore) might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

SGX:F1E Income Statement Export November 3rd 18

Hedge funds don’t have many shares in Low Keng Huat (Singapore). Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Low Keng Huat (Singapore)

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 information suggests that insiders own more than half of Low Keng Huat (Singapore) Limited. This gives them effective control of the company. So they have a S$281m stake in this S$406m business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public holds a 23% stake in F1E. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

Our data indicates that Private Companies hold 7.2%, of the company’s shares. It’s hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free .

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

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