Key Insights

• Hock Lian Seng Holdings' significant insider ownership suggests inherent interests in company's expansion

• Leong Hai Chua owns 60% of the company

• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Hock Lian Seng Holdings Limited (SGX:J2T) should be aware of the most powerful shareholder groups. With 77% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.

Let's take a closer look to see what the different types of shareholders can tell us about Hock Lian Seng Holdings.

See our latest analysis for Hock Lian Seng Holdings

What Does The Lack Of Institutional Ownership Tell Us About Hock Lian Seng 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. 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. Hock Lian Seng Holdings might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Hock Lian Seng Holdings is not owned by hedge funds. The company's CEO Leong Hai Chua is the largest shareholder with 60% of shares outstanding. 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. For context, the second largest shareholder holds about 5.8% of the shares outstanding, followed by an ownership of 5.1% by the third-largest shareholder. Interestingly, the third-largest shareholder, Siok Peng Chua is also a Member of the Board of Directors, again, indicating 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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Hock Lian Seng Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems that insiders own more than half the Hock Lian Seng Holdings Limited stock. This gives them a lot of power. So they have a S$104m stake in this S$136m business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 23% stake in Hock Lian Seng Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Hock Lian Seng Holdings better, we need to consider many other factors. For example, we've discovered 2 warning signs for Hock Lian Seng Holdings that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.