Hock Lian Seng Holdings Limited's (SGX:J2T) CEO Leong Hai Chua is the most upbeat insider, and their holdings increased by 10.0% last week

Key Insights

• Insiders appear to have a vested interest in Hock Lian Seng Holdings' growth, as seen by their sizeable ownership
• The largest shareholder of the company is Leong Hai Chua with a 60% stake
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Hock Lian Seng Holdings Limited (SGX:J2T), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 77% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, insiders benefitted the most after the company's market cap rose by S$13m last week.

In the chart below, we zoom in on the different ownership groups of 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?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

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. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Hock Lian Seng Holdings' earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Hedge funds don't have many shares in Hock Lian Seng Holdings. With a 60% stake, CEO Leong Hai Chua is the largest shareholder. This implies that they possess majority interests and have significant control over the company. Investors usually consider it a good sign when the company leadership has such a significant stake, as this is widely perceived to increase the chance that the management will act in the best interests of the company. With 5.8% and 5.1% of the shares outstanding respectively, Aik Koon Chua and Siok Peng Chua are the second and third largest shareholders. 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.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders own more than half of Hock Lian Seng Holdings Limited. This gives them effective control of the company. That means they own S$108m worth of shares in the S$141m company. That's quite meaningful. 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 23% ownership, the general public, mostly comprising of individual investors, have some degree of sway over 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. Take risks for example - Hock Lian Seng Holdings has 2 warning signs we think you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free 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.

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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.