BHG Retail REIT's (SGX:BMGU) stock price dropped 14% last week; private companies would not be happy

By
Simply Wall St
Published
April 13, 2022
SGX:BMGU
Source: Shutterstock

If you want to know who really controls BHG Retail REIT (SGX:BMGU), then you'll have to look at the makeup of its share registry. We can see that private companies own the lion's share in the company with 42% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of private companies took a hit after last week’s 14% price drop, insiders with their 25% also suffered.

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

See our latest analysis for BHG Retail REIT

ownership-breakdown
SGX:BMGU Ownership Breakdown April 13th 2022

What Does The Institutional Ownership Tell Us About BHG Retail REIT?

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 BHG Retail REIT 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. 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 BHG Retail REIT, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
SGX:BMGU Earnings and Revenue Growth April 13th 2022

BHG Retail REIT is not owned by hedge funds. Beijing Hualian Group Investment Holding Co., Ltd. is currently the largest shareholder, with 29% of shares outstanding. The second and third largest shareholders are ABN AMRO Group N.V., Asset Management Arm and Authority of Qianhai Shenzhen-HK Modern Service Industry Cooperation Zone, with an equal amount of shares to their name at 13%.

After doing some more digging, we found that the top 3 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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of BHG Retail REIT

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.

It seems insiders own a significant proportion of BHG Retail REIT. Insiders have a S$61m stake in this S$244m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 11% stake in the company, and hence can't easily be ignored. 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

Our data indicates that Private Companies hold 42%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Public Company Ownership

Public companies currently own 6.7% of BHG Retail REIT stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - BHG Retail REIT has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

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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