Significant control over Hotel Properties by private companies implies that the general public has more power to influence management and governance-related decisions
A total of 2 investors have a majority stake in the company with 60% ownership
To get a sense of who is truly in control of Hotel Properties Limited (SGX:H15), it is important to understand the ownership structure of the business. With 58% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
Meanwhile, individual insiders make up 31% of the company’s shareholders. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.
Let's delve deeper into each type of owner of Hotel Properties, beginning with the chart below.
What Does The Lack Of Institutional Ownership Tell Us About Hotel Properties?
We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.
There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. 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. Hotel Properties' 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 Earnings and Revenue Growth May 29th 2024
We note that hedge funds don't have a meaningful investment in Hotel Properties. The company's largest shareholder is 68 Holdings Pte Ltd., with ownership of 34%. Meanwhile, the second and third largest shareholders, hold 25% and 22%, of the shares outstanding, respectively. Beng Seng Ong, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.
A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 60% stake.
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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
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.
Our information suggests that insiders maintain a significant holding in Hotel Properties Limited. Insiders own S$590m worth of shares in the S$1.9b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.
General Public Ownership
The general public, who are usually individual investors, hold a 11% stake in Hotel Properties. 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 58%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Hotel Properties better, we need to consider many other factors. Take risks for example - Hotel Properties has 2 warning signs (and 1 which is a bit unpleasant) we think you should know about.
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.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
