Yahoo Finance With a 82% stake, Nordic Group Limited (SGX:MR7) insiders have a lot riding on the company
Key Insights
Significant insider control over Nordic Group implies vested interests in company growth
55% of the company is held by a single shareholder (Yeh Hong Chang)
Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
Every investor in Nordic Group Limited (SGX:MR7) should be aware of the most powerful shareholder groups. With 82% 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.
So it follows, every decision made by insiders of Nordic Group regarding the company's future would be crucial to them.
In the chart below, we zoom in on the different ownership groups of Nordic Group.
Check out our latest analysis for Nordic Group
What Does The Lack Of Institutional Ownership Tell Us About Nordic Group?
We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.
There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. Alternatively, there might be something about the company that has kept institutional investors away. Nordic Group's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.
Nordic Group is not owned by hedge funds. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Nordic Group's case, its Top Key Executive, Yeh Hong Chang, is the largest shareholder, holding 55% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 11% and 8.1%, of the shares outstanding, respectively. Interestingly, the second and third-largest shareholders also happen to be the Senior Key Executive and Member of the Board of Directors, respectively. This once again signifies considerable insider ownership amongst the company's top shareholders.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of Nordic Group
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own the majority of Nordic Group Limited. This means they can collectively make decisions for the company. That means they own S$120m worth of shares in the S$146m company. That's quite meaningful. 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 Nordic Group. 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:
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 Nordic Group 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.
