The recent 13% gain must have brightened CEO Teek Son Wong's week, Riverstone Holdings Limited's (SGX:AP4) most bullish insider

Key Insights

• Significant insider control over Riverstone Holdings implies vested interests in company growth
• 51% of the company is held by a single shareholder (Teek Son Wong)
• 16% of Riverstone Holdings is held by Institutions

If you want to know who really controls Riverstone Holdings Limited (SGX:AP4), then you'll have to look at the makeup of its share registry. With 65% stake, individual insiders 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, insiders benefitted the most after the company's market cap rose by S$96m last week.

In the chart below, we zoom in on the different ownership groups of Riverstone Holdings.

View our latest analysis for Riverstone Holdings

What Does The Institutional Ownership Tell Us About Riverstone Holdings?

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 Riverstone Holdings does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Riverstone Holdings, (below). Of course, keep in mind that there are other factors to consider, too.

Riverstone Holdings is not owned by hedge funds. With a 51% stake, CEO Teek Son Wong is the largest shareholder. With such a huge stake, we infer that they have significant control of the future of the company. It's usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider with such skin in the game. In comparison, the second and third largest shareholders hold about 8.8% and 4.8% of the stock. Interestingly, the second-largest shareholder, Wai Keong Lee is also Top Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

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

Insider Ownership Of Riverstone 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.

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.

It seems that insiders own more than half the Riverstone Holdings Limited stock. This gives them a lot of power. So they have a S$562m stake in this S$867m business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 19% stake in the company, and hence can't easily be ignored. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Riverstone Holdings better, we need to consider many other factors. For instance, we've identified 3 warning signs for Riverstone Holdings (2 are concerning) that you should be aware of.

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.