To get an idea of who actually controls Venture Corporation Limited (SGX: V03), it is important to understand the ownership structure of the company. The group holding the largest number of shares in the company, around 48% to be precise, are made up of individual investors. In other words, the group faces the maximum upside potential (or downside risk).
Institutions, on the other hand, represent 44% of the company’s shareholders. Generally speaking, as a company grows, institutions increase their ownership. Conversely, insiders often decrease their ownership over time.
Let’s take a closer look at what different types of shareholders can tell us about Venture.
Check out our latest analysis for Venture
What does institutional ownership tell us about Venture?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.
We can see that Venture has institutional investors; and they own a good part of the shares of the company. This may indicate that the company has some degree of credibility in the investment community. However, it is best to be wary of relying on the so-called validation that accompanies institutional investors. They are also sometimes wrong. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Venture’s historic earnings and revenue below, but keep in mind there’s always more to the story.
We note that hedge funds have no significant investment in Venture. Because actions speak louder than words, we consider it a good sign when insiders hold a significant stake in a company. In the case of Venture, its senior executive, Ngit Liong Wong, is the largest shareholder, holding 7.1% of the outstanding shares. Schroder Investment Management Limited is the second largest shareholder with 6.8% of the common stock and BlackRock, Inc. owns approximately 6.0% of the company’s stock.
Looking at our ownership data, we found that 25 of the major shareholders collectively own less than 50% of the share register, implying that no single individual holds a majority stake.
While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. There are plenty of analysts covering the stock, so it might be interesting to see what they are predicting as well.
Venture Insider Ownership
The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.
Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
Shareholders would probably be interested to learn that insiders hold shares of Venture Corporation Limited. This is a big company, so it’s good to see this level of alignment. Insiders hold S$403 million worth of shares (at current prices). It’s good to see this level of investment by insiders. You can check here if these insiders have bought recently.
General public property
The general public, including retail investors, owns 48% of the company’s shares and therefore cannot be easily ignored. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.
While it is worth considering the different groups that own a business, there are other, even more important factors. Take for example the ubiquitous specter of investment risk. We have identified 1 warning sign with Venture, and understanding them should be part of your investment process.
If you prefer to find out what analysts are predicting in terms of future growth, don’t miss this free analyst forecast report.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.