Hong Leong Finance Limited's (SGX:S41) largest shareholders are private companies with 57% ownership, individual investors own 33%
In This Article:
Key Insights
-
The considerable ownership by private companies in Hong Leong Finance indicates that they collectively have a greater say in management and business strategy
-
The largest shareholder of the company is Hong Leong Investment Holdings Pte. Ltd. with a 55% stake
-
Using data from company's past performance alongside ownership research, one can better assess the future performance of a company
Every investor in Hong Leong Finance Limited (SGX:S41) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 57% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).
Meanwhile, individual investors make up 33% of the company’s shareholders.
In the chart below, we zoom in on the different ownership groups of Hong Leong Finance.
Check out our latest analysis for Hong Leong Finance
What Does The Institutional Ownership Tell Us About Hong Leong Finance?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
We can see that Hong Leong Finance 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 Hong Leong Finance's historic earnings and revenue below, but keep in mind there's always more to the story.
Hong Leong Finance is not owned by hedge funds. Our data shows that Hong Leong Investment Holdings Pte. Ltd. is the largest shareholder with 55% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. For context, the second largest shareholder holds about 3.1% of the shares outstanding, followed by an ownership of 2.0% by the third-largest shareholder. In addition, we found that Leng Beng Kwek, the CEO has 1.5% of the shares allocated to their name.
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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.