Could The Global Palm Resources Holdings Limited (SGX:BLW) Ownership Structure Tell Us Something Useful?

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A look at the shareholders of Global Palm Resources Holdings Limited (SGX:BLW) can tell us which group is most powerful. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.'

Global Palm Resources Holdings is a smaller company with a market capitalization of S$37m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it's seems that institutions are not really that prevalent on the share registry. We can zoom in on the different ownership groups, to learn more about BLW.

See our latest analysis for Global Palm Resources Holdings

SGX:BLW Ownership Summary, July 12th 2019

What Does The Lack Of Institutional Ownership Tell Us About Global Palm Resources 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. 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. Global Palm Resources 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.

SGX:BLW Income Statement, July 12th 2019

Hedge funds don't have many shares in Global Palm Resources Holdings. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Global Palm Resources Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 own more than half of Global Palm Resources Holdings Limited. This gives them effective control of the company. So they have a S$29m stake in this S$37m business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public holds a 22% stake in BLW. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

Of course this may not be the best stock to buy. So take a peek at this free 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.