Private companies are The Hour Glass Limited's (SGX:AGS) biggest owners and were hit after market cap dropped S$72m

Key Insights

• Significant control over Hour Glass by private companies implies that the general public has more power to influence management and governance-related decisions
• TYC Investment Pte. Ltd. owns 52% of the company
• Insiders own 19% of Hour Glass

Every investor in The Hour Glass Limited (SGX:AGS) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 57% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of private companies took a hit after last week’s 4.9% price drop, insiders with their 19% also suffered.

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

Check out our latest analysis for Hour Glass

What Does The Institutional Ownership Tell Us About Hour Glass?

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 Hour Glass 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Hour Glass' historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Hour Glass. Looking at our data, we can see that the largest shareholder is TYC Investment Pte. Ltd. with 52% of shares outstanding. This implies that they have majority interest control of the future of the company. Yun Tay is the second largest shareholder owning 9.9% of common stock, and Amstay Pte Ltd. holds about 5.6% of the company stock. Yun Tay, who is the second-largest shareholder, also happens to hold the title of Top Key Executive. Furthermore, CEO Wee Jin Tay is the owner of 4.1% of the company's shares.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Hour Glass

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 information suggests that insiders maintain a significant holding in The Hour Glass Limited. It is very interesting to see that insiders have a meaningful S$260m stake in this S$1.4b business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 16% stake in Hour Glass. 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

We can see that Private Companies own 57%, of the shares on issue. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 2 warning signs for Hour Glass (1 is potentially serious!) that you should be aware of before investing here.

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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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.