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A look at the shareholders of Brook Crompton Holdings Ltd. (SGX:AWC) can tell us which group is most powerful. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Warren Buffett said that he likes ‘a business with enduring competitive advantages that is run by able and owner-oriented people’. So it’s nice to see some insider ownership, because it may suggest that management is owner-oriented.
With a market capitalization of S$25m, Brook Crompton Holdings is a small cap stock, so it might not be well known by many institutional investors. In the chart below below, we can see that institutional investors have not yet purchased shares. Let’s take a closer look to see what the different types of shareholder can tell us about AWC.
Check out our latest analysis for Brook Crompton Holdings
What Does The Lack Of Institutional Ownership Tell Us About Brook Crompton 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 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. Brook Crompton Holdings’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.
We note that hedge funds don’t have a meaningful investment in Brook Crompton Holdings. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Brook Crompton Holdings
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
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 most recent data indicates that insiders own some shares in Brook Crompton Holdings Ltd.. In their own names, insiders own S$1.8m worth of stock in the S$25m company. It is good to see some investment by insiders, but I usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.