A look at the shareholders of United Overseas Bank Limited (SGX:U11) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are retail investors with 35% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Institutions, on the other hand, account for 25% of the company's stockholders. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones.
Let's delve deeper into each type of owner of United Overseas Bank, beginning with the chart below.
What Does The Institutional Ownership Tell Us About United Overseas Bank?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
We can see that United Overseas Bank does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 United Overseas Bank's historic earnings and revenue below, but keep in mind there's always more to the story.
SGX:U11 Earnings and Revenue Growth June 9th 2023
Hedge funds don't have many shares in United Overseas Bank. Looking at our data, we can see that the largest shareholder is Cho-Yaw Wee with 11% of shares outstanding. Wee Investments Pte Ltd is the second largest shareholder owning 8.0% of common stock, and Wah Hin & Co Pte Ltd holds about 5.2% of the company stock. In addition, we found that Ee Cheong Wee, the CEO has 2.6% of the shares allocated to their name.
After doing some more digging, we found that the top 13 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.
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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of United Overseas Bank
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 United Overseas Bank Limited. Insiders own S$7.5b worth of shares in the S$47b 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
With a 35% ownership, the general public, mostly comprising of individual investors, have some degree of sway over United Overseas Bank. 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.
Private Company Ownership
We can see that Private Companies own 20%, of the shares on issue. 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.
Public Company Ownership
It appears to us that public companies own 4.0% of United Overseas Bank. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.
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.
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