Insiders own 34% of Aspial Corporation Limited (SGX:A30) shares but private companies control 54% of the company

Simply Wall St

Sun, May 28, 2023, 8:17 PM 4 min read

Key Insights

Significant control over Aspial by private companies implies that the general public has more power to influence management and governance-related decisions
The largest shareholder of the company is MLHS Holdings Pte Ltd. with a 54% stake
Insider ownership in Aspial is 34%

Every investor in Aspial Corporation Limited (SGX:A30) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private companies with 54% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Individual insiders, on the other hand, account for 34% of the company's stockholders. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.

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

View our latest analysis for Aspial

ownership-breakdown — SGX:A30 Ownership Breakdown May 29th 2023

What Does The Lack Of Institutional Ownership Tell Us About Aspial?

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. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Aspial, for yourself, below.

earnings-and-revenue-growth — SGX:A30 Earnings and Revenue Growth May 29th 2023

Hedge funds don't have many shares in Aspial. MLHS Holdings Pte Ltd. is currently the company's largest shareholder with 54% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Meanwhile, the second and third largest shareholders, hold 19% and 4.9%, of the shares outstanding, respectively. Wee Seng Koh, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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. 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 Aspial

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 Aspial Corporation Limited. Insiders own S$51m worth of shares in the S$153m company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 12% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Aspial. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 54%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Aspial better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Aspial you should know about.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.

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