GSH Corporation Limited (SGX:BDX) Top Key Executive Seng Hui Goi, the company's largest shareholder sees 12%reduction in holdings value

Key Insights

• Insiders appear to have a vested interest in GSH's growth, as seen by their sizeable ownership
• 64% of the company is held by a single shareholder (Seng Hui Goi)
• 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 GSH Corporation Limited (SGX:BDX), 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 73% 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 as a group endured the highest losses after market cap fell by S$50m.

Let's take a closer look to see what the different types of shareholders can tell us about GSH.

Check out our latest analysis for GSH

What Does The Lack Of Institutional Ownership Tell Us About GSH?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. GSH might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Hedge funds don't have many shares in GSH. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In GSH's case, its Top Key Executive, Seng Hui Goi, is the largest shareholder, holding 64% of shares outstanding. Guan Hui Ee is the second largest shareholder owning 8.1% of common stock, and Goodview Properties Pte Ltd holds about 5.1% of the company stock. Interestingly, the second-largest shareholder, Guan Hui Ee is also Chief Executive Officer, again, pointing towards 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 GSH

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

It seems that insiders own more than half the GSH Corporation Limited stock. This gives them a lot of power. Given it has a market cap of S$362m, that means they have S$263m worth of shares. 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 17% stake in GSH. 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

Our data indicates that Private Companies hold 10%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for GSH 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.