Key Insights

• The considerable ownership by individual investors in UOL Group indicates that they collectively have a greater say in management and business strategy

• 52% of the business is held by the top 5 shareholders

• Institutional ownership in UOL Group is 22%

To get a sense of who is truly in control of UOL Group Limited (SGX:U14), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 32% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

Private companies, on the other hand, account for 30% of the company's stockholders.

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

What Does The Institutional Ownership Tell Us About UOL Group?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

UOL Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 UOL Group's historic earnings and revenue below, but keep in mind there's always more to the story.

SGX:U14 Earnings and Revenue Growth November 19th 2024

UOL Group is not owned by hedge funds. Our data shows that Wee Investments Pte Ltd is the largest shareholder with 16% of shares outstanding. In comparison, the second and third largest shareholders hold about 14% and 8.5% of the stock.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of UOL 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.

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 data suggests that insiders own under 1% of UOL Group Limited in their own names. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own S$21m worth of shares. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 32% stake in UOL Group. 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.

Private Company Ownership

We can see that Private Companies own 30%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Public Company Ownership

It appears to us that public companies own 16% of UOL Group. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.