Key Insights
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Significant insider control over Nordic Group implies vested interests in company growth
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Yeh Hong Chang owns 55% of the company
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Past performance of a company along with ownership data serve to give a strong idea about prospects for a business
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. And the group that holds the biggest piece of the pie are individual insiders with 83% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.
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?
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 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 might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.
We note that hedge funds don't have a meaningful investment in Nordic Group. 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. Choon Hin Lin is the second largest shareholder owning 11% of common stock, and Ling Ling Teo holds about 8.1% of the company stock. Note that two of the top three shareholders are also Senior Key Executive and Member of the Board of Directors, respectively, once again pointing to significant ownership by company insiders.
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 Nordic Group
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.