A look at the shareholders of LCT Holdings Limited (SGX:BJL) can tell us which group is most powerful. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, ‘Don’t tell me what you think, tell me what you have in your portfolio.’
LCT Holdings is a smaller company with a market capitalization of S$18.0m, so it may still be flying under the radar of many institutional investors. Taking a look at the our data on the ownership groups (below), it’s seems that institutional investors have not yet purchased shares. Let’s take a closer look to see what the different types of shareholder can tell us about BJL.
View our latest analysis for LCT Holdings
What Does The Lack Of Institutional Ownership Tell Us About LCT Holdings?
Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it’s unusual to see larger companies without any institutional investors.
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. Alternatively, there might be something about the company that has kept institutional investors away. LCT Holdings’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.
Hedge funds don’t have a many shares in LCT Holdings. As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of LCT Holdings
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
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 LCT Holdings Limited. Insiders own S$3.1m worth of shares in the S$18.0m company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.