What Type Of Shareholder Owns Watts International Maritime Engineering Limited’s (HKG:2258)?

Ricardo Crouch

Sun, Feb 17, 2019, 6:07 PM

A look at the shareholders of Watts International Maritime Engineering Limited (HKG:2258) can tell us which group is most powerful. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. 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.’

Watts International Maritime Engineering is not a large company by global standards. It has a market capitalization of HK$1.1b, which means it wouldn’t have the attention of many institutional investors. In the chart below below, we can see that institutions are not on the share registry. We can zoom in on the different ownership groups, to learn more about 2258.

See our latest analysis for Watts International Maritime Engineering

SEHK:2258 Ownership Summary, February 18th 2019

What Does The Lack Of Institutional Ownership Tell Us About Watts International Maritime Engineering?

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 could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don’t attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. Watts International Maritime Engineering might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

SEHK:2258 Income Statement, February 18th 2019

We note that hedge funds don’t have a meaningful investment in Watts International Maritime Engineering. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Watts International Maritime Engineering

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.

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 most recent data indicates that insiders own a reasonable proportion of Watts International Maritime Engineering Limited. Insiders have a HK$497m stake in this HK$1.1b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 25% ownership, the general public have some degree of sway over 2258. 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

We can see that Private Companies own 30%, of the shares on issue. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. On rare occasion, data errors may occur. Thank you for reading.