If you want to know who really controls Riverstone Holdings Limited (SGX:AP4), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 65% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
So it follows, every decision made by insiders of Riverstone Holdings regarding the company's future would be crucial to them.
Let's take a closer look to see what the different types of shareholders can tell us about Riverstone Holdings.
What Does The Institutional Ownership Tell Us About Riverstone Holdings?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
Riverstone Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Riverstone Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.
SGX:AP4 Earnings and Revenue Growth October 2nd 2023
We note that hedge funds don't have a meaningful investment in Riverstone Holdings. With a 51% stake, CEO Teek Son Wong is the largest shareholder. With such a huge stake, we infer that they have significant control of the future of the company. It's usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider with such skin in the game. In comparison, the second and third largest shareholders hold about 8.8% and 3.4% of the stock. Interestingly, the second-largest shareholder, Wai Keong Lee is also Top Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of Riverstone 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 most recent data indicates that insiders own the majority of Riverstone Holdings Limited. This means they can collectively make decisions for the company. Given it has a market cap of S$889m, that means they have S$577m worth of shares. 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-- including retail investors -- own 25% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Riverstone Holdings better, we need to consider many other factors. Be aware that Riverstone Holdings is showing 2 warning signs in our investment analysis, and 1 of those makes us a bit uncomfortable...
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.
