Private companies are Hotel Properties Limited's (SGX:H15) biggest owners and were hit after market cap dropped S$106m

Key Insights

• Significant control over Hotel Properties by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 2 shareholders own 59% of the company
• Insider ownership in Hotel Properties is 31%

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Every investor in Hotel Properties Limited (SGX:H15) should be aware of the most powerful shareholder groups. With 58% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders who own 31% came under pressure after market cap dropped to S$2.5b last week,private companies took the most losses.

Let's delve deeper into each type of owner of Hotel Properties, beginning with the chart below.

Check out our latest analysis for Hotel Properties

What Does The Lack Of Institutional Ownership Tell Us About Hotel Properties?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

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. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Hotel Properties, for yourself, below.

Hedge funds don't have many shares in Hotel Properties. 68 Holdings Pte Ltd. is currently the company's largest shareholder with 34% of shares outstanding. For context, the second largest shareholder holds about 25% of the shares outstanding, followed by an ownership of 22% by the third-largest shareholder.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 Hotel Properties

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders maintain a significant holding in Hotel Properties Limited. Insiders own S$778m worth of shares in the S$2.5b company. That's quite meaningful. 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

The general public-- including retail investors -- own 11% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 58%, of the Hotel Properties 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 Hotel Properties better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Hotel Properties you should be aware of, and 1 of them doesn't sit too well with us.

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.