Azeus Systems Holdings Ltd.'s (SGX:BBW) 16% gain last week benefited both private companies who own 53% as well as insiders

Key Insights

• Azeus Systems Holdings' significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• Mu Xia Ltd. owns 51% of the company
• Insiders own 31% of Azeus Systems Holdings

Every investor in Azeus Systems Holdings Ltd. (SGX:BBW) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 53% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While private companies were the group that reaped the most benefits after last week’s 16% price gain, insiders also received a 31% cut.

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

Check out our latest analysis for Azeus Systems Holdings

What Does The Lack Of Institutional Ownership Tell Us About Azeus Systems Holdings?

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 could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. Azeus Systems Holdings' earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

We note that hedge funds don't have a meaningful investment in Azeus Systems Holdings. The company's largest shareholder is Mu Xia Ltd., with ownership of 51%. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Wan Lik Lee is the second largest shareholder owning 27% of common stock, and Teik Khoo holds about 1.9% of the company stock. Wan Lik Lee, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Azeus Systems 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.

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.

Our information suggests that insiders maintain a significant holding in Azeus Systems Holdings Ltd.. It has a market capitalization of just S$301m, and insiders have S$94m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. 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 15% stake in Azeus Systems Holdings. 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

We can see that Private Companies own 53%, of the shares on issue. 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. To that end, you should learn about the 3 warning signs we've spotted with Azeus Systems Holdings (including 2 which are potentially serious) .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.