Could The AV Promotions Holdings Limited (HKG:8419) Ownership Structure Tell Us Something Useful?

The big shareholder groups in AV Promotions Holdings Limited (HKG:8419) have power over the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Warren Buffett said that he likes ‘a business with enduring competitive advantages that is run by able and owner-oriented people’. So it’s nice to see some insider ownership, because it may suggest that management is owner-oriented.

With a market capitalization of HK$132m, AV Promotions Holdings is a small cap stock, so it might not be well known by many institutional investors. In the chart below, we can see that institutional investors have not yet purchased shares. Let’s delve deeper into each type of owner, to discover more about 8419.

View our latest analysis for AV Promotions Holdings

SEHK:8419 Ownership Summary, December 13th 2019
SEHK:8419 Ownership Summary, December 13th 2019

What Does The Lack Of Institutional Ownership Tell Us About AV Promotions Holdings?

Small companies that are not very actively traded often lack institutional investors, but it’s less common to see large companies without them.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don’t attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. It is also possible that fund managers don’t own the stock because they aren’t convinced it will perform well. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of AV Promotions Holdings, for yourself, below.

SEHK:8419 Income Statement, December 13th 2019
SEHK:8419 Income Statement, December 13th 2019

We note that hedge funds don’t have a meaningful investment in AV Promotions Holdings. We’re not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of AV Promotions Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own the majority of AV Promotions Holdings Limited. This means they can collectively make decisions for the company. So they have a HK$97m stake in this HK$132m business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 27% ownership, the general public have some degree of sway over 8419. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

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.

If you would prefer check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, backed by strong financial data.

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.

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.

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