Insiders were the biggest winners as Sheng Siong Group Ltd's (SGX:OV8) market cap grew by S$75m last week

Key Insights

• Significant insider control over Sheng Siong Group implies vested interests in company growth
• The top 4 shareholders own 57% of the company
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

Every investor in Sheng Siong Group Ltd (SGX:OV8) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 37% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit S$2.5b market cap following a 3.1% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Sheng Siong Group.

See our latest analysis for Sheng Siong Group

What Does The Institutional Ownership Tell Us About Sheng Siong Group?

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 Sheng Siong Group 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Sheng Siong Group's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Sheng Siong Group. Our data shows that Sheng Siong Holdings Pte. Ltd. is the largest shareholder with 30% of shares outstanding. The second and third largest shareholders are Hock Chee Lim and Hock Eng Lim, with an equal amount of shares to their name at 9.2%. Interestingly, the bottom two of the top three shareholders also hold the title of Chief Executive Officer and Chairman of the Board, respectively, suggesting that these insiders have a personal stake in the company.

On looking further, we found that 57% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Sheng Siong Group

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.

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 maintain a significant holding in Sheng Siong Group Ltd. It is very interesting to see that insiders have a meaningful S$922m stake in this S$2.5b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 24% stake in Sheng Siong Group. 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 30%, of the Sheng Siong Group stock. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Sheng Siong Group better, we need to consider many other factors. Take risks for example - Sheng Siong Group has 1 warning sign we think you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.