How Much Of KSH Holdings Limited (SGX:ER0) Do Insiders Own?

By
Simply Wall St
Published
May 18, 2020
SGX:ER0

The big shareholder groups in KSH Holdings Limited (SGX:ER0) have power over the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

With a market capitalization of S$158m, KSH 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 institutional investors have not yet purchased much of the company. Let's delve deeper into each type of owner, to discover more about KSH Holdings.

View our latest analysis for KSH Holdings

SGX:ER0 Ownership Summary May 18th 2020
SGX:ER0 Ownership Summary May 18th 2020

What Does The Lack Of Institutional Ownership Tell Us About KSH 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. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. KSH Holdings might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

SGX:ER0 Income Statement May 18th 2020
SGX:ER0 Income Statement May 18th 2020

We note that hedge funds don't have a meaningful investment in KSH Holdings. The company's CEO Chee Onn Choo is the largest shareholder with 19% of shares outstanding. The second and third largest shareholders are Cheng Hoe Tok and Ngat Khow Kwok, each holding around 14% of the shares outstanding. Note that they are also Top Key Executive and Member of the Board of Directors, respectively, once again pointing to significant ownership by company insiders.

Our analysis suggests that the top 4 shareholders control 60% of the company which essentially means that there is concentrated ownership amongst the top shareholders, most of whom happen to be insiders!

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. 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 KSH Holdings

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.

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.

Our most recent data indicates that insiders own the majority of KSH Holdings Limited. This means they can collectively make decisions for the company. So they have a S$114m stake in this S$158m 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

With a 27% ownership, the general public have some degree of sway over ER0. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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. To that end, you should learn about the 5 warning signs we've spotted with KSH Holdings (including 1 which is shouldn't be ignored) .

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.

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.

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. Thank you for reading.

Promoted
When trading KSH Holdings or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.


Simply Wall St character - Warren

Simply Wall St

Simply Wall St is a financial technology startup focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of equity analysts with a public, market-beating track record. Learn more about the team behind Simply Wall St.