Retail investors in Sheng Siong Group Ltd (SGX:OV8) are its biggest bettors, and their bets paid off as stock gained 3.4% last week

Key Insights

• The considerable ownership by retail investors in Sheng Siong Group indicates that they collectively have a greater say in management and business strategy
• The top 4 shareholders own 53% of the company
• 27% of Sheng Siong Group is held by insiders

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A look at the shareholders of Sheng Siong Group Ltd (SGX:OV8) can tell us which group is most powerful. With 34% stake, retail investors 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.

Clearly, retail investors benefitted the most after the company's market cap rose by S$105m last week.

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

View our latest analysis for Sheng Siong Group

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

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.

As you can see, institutional investors have a fair amount of stake in Sheng Siong Group. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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. The company's largest shareholder is Sheng Siong Holdings Pte. Ltd., with ownership of 30%. With 8.6% and 7.8% of the shares outstanding respectively, Hock Eng Lim and Hock Chee Lim are the second and third largest shareholders. Note that the second and third-largest shareholders are also Top Key Executive and Member of the Board of Directors, respectively, meaning that the company's top shareholders are insiders.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Sheng Siong Group

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.

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 a reasonable proportion of Sheng Siong Group Ltd. It has a market capitalization of just S$3.2b, and insiders have S$857m worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 34% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sheng Siong Group. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

We can see that Private Companies own 30%, of the shares on issue. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Sheng Siong Group , and understanding them should be part of your investment process.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.