New Zealand markets open in 8 hours 38 minutes
  • NZX 50

    12,118.67
    -93.29 (-0.76%)
     
  • NZD/USD

    0.6366
    +0.0057 (+0.91%)
     
  • ALL ORDS

    7,695.80
    -44.70 (-0.58%)
     
  • OIL

    78.42
    -0.05 (-0.06%)
     
  • GOLD

    1,894.00
    +3.30 (+0.17%)
     

With 80% ownership, insiders at Nordic Group Limited (SGX:MR7) are pretty optimistic and have been buying recently

To get a sense of who is truly in control of Nordic Group Limited (SGX:MR7), it is important to understand the ownership structure of the business. With 80% 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.

It's interesting to note that insiders have been buying shares recently. This could signal that stock prices could go up and insiders are here for it.

In the chart below, we zoom in on the different ownership groups of Nordic Group.

See our latest analysis for Nordic Group

ownership-breakdown
ownership-breakdown

What Does The Lack Of Institutional Ownership Tell Us About Nordic Group?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Nordic Group might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

earnings-and-revenue-growth
earnings-and-revenue-growth

Nordic Group is not owned by hedge funds. Our data suggests that Yeh Hong Chang, who is also the company's Top Key Executive, holds the most number of shares at 55%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. With 11% and 8.1% of the shares outstanding respectively, Choon Hin Lin and Ling Ling Teo are the second and third largest shareholders. 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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Nordic Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 that insiders own more than half the Nordic Group Limited stock. This gives them a lot of power. That means they own S$154m worth of shares in the S$192m company. That's quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Nordic Group. 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.

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 3 warning signs for Nordic Group you should be aware of, and 1 of them can't be ignored.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here