Could The Heeton Holdings Limited (SGX:5DP) Ownership Structure Tell Us Something Useful?

If you want to know who really controls Heeton Holdings Limited (SGX:5DP), then you’ll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies. 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.

With a market capitalization of S$139m, Heeton Holdings is a small cap stock, so it might not be well known by many institutional investors. Taking a look at our data on the ownership groups (below), it’s seems that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about Heeton Holdings.

Check out our latest analysis for Heeton Holdings

SGX:5DP Ownership Summary, March 8th 2020
SGX:5DP Ownership Summary, March 8th 2020

What Does The Institutional Ownership Tell Us About Heeton 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.

We can see that Heeton Holdings does have institutional investors; and they hold 7.7% of the 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Heeton Holdings, (below). Of course, keep in mind that there are other factors to consider, too.

SGX:5DP Income Statement, March 8th 2020
SGX:5DP Income Statement, March 8th 2020

Heeton Holdings is not owned by hedge funds. The company’s largest shareholder is Heeton Investments Pte Ltd., with ownership of 20%, The second largest shareholder with 17%, is Hong Heng Co Pte Ltd., followed by Giap Eng Toh, with an ownership of 13%. Giap Eng Toh also happens to hold the title of Vice Chairman.

A deeper analysis brings to light the fact that 57% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. We’re not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Heeton Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems insiders own a significant proportion of Heeton Holdings Limited. Insiders own S$37m worth of shares in the S$139m company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 23% ownership, the general public have some degree of sway over 5DP. 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

It seems that Private Companies own 43%, of the 5DP stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand Heeton Holdings better, we need to consider many other factors. For instance, we’ve identified 3 warning signs for Heeton Holdings (2 are a bit unpleasant) that you should be aware of.

If you would prefer check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, backed by strong financial data.

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.

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.

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