With a 71% stake, Credit Bureau Asia Limited (SGX:TCU) insiders have a lot riding on the company




  • In Business
  • 2022-12-05 23:54:19Z
  • By Simply Wall St.
 

A look at the shareholders of Credit Bureau Asia Limited (SGX:TCU) can tell us which group is most powerful. The group holding the most number of shares in the company, around 71% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

So, insiders of Credit Bureau Asia have a lot at stake and every decision they make on the company's future is important to them from a financial point of view.

Let's delve deeper into each type of owner of Credit Bureau Asia, beginning with the chart below.

View our latest analysis for Credit Bureau Asia

What Does The Institutional Ownership Tell Us About Credit Bureau Asia?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Credit Bureau Asia already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Credit Bureau Asia's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Credit Bureau Asia. Looking at our data, we can see that the largest shareholder is the CEO Chiang Koo with 64% of shares outstanding. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. With 6.2% and 4.6% of the shares outstanding respectively, Wah Liang Lim and abrdn plc are the second and third largest shareholders. Interestingly, the second-largest shareholder, Wah Liang Lim is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Credit Bureau Asia

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 information suggests that insiders own more than half of Credit Bureau Asia Limited. This gives them effective control of the company. Given it has a market cap of S$219m, that means they have S$156m worth of shares. 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

With a 21% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Credit Bureau Asia. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Credit Bureau Asia , and understanding them should be part of your investment process.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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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