Every investor in Plover Bay Technologies Limited (HKG:1523) should be aware of the most powerful shareholder groups. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, ‘Don’t tell me what you think, tell me what you have in your portfolio.
Plover Bay Technologies is a smaller company with a market capitalization of HK$1.0b, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have not yet purchased much of the company. We can zoom in on the different ownership groups, to learn more about Plover Bay Technologies.
What Does The Institutional Ownership Tell Us About Plover Bay Technologies?
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.
Institutions own less than 5% of Plover Bay Technologies. That indicates that the company is on the radar of some funds, but it isn’t particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.
We note that hedge funds don’t have a meaningful investment in Plover Bay Technologies. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Plover Bay Technologies’s case, its Top Key Executive, Wing Hong Chan, is the largest shareholder, holding 72% of shares outstanding. The second and third largest shareholders are Grandeur Peak Global Advisors, LLC and Ming Pui Chong, holding 1.7% and 0.4%, respectively. Interestingly, Ming Pui Chong is also a Member of the Board of Directors, again, indicating 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 Plover Bay Technologies
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
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 information suggests that insiders own more than half of Plover Bay Technologies Limited. This gives them effective control of the company. That means they own HK$764m worth of shares in the HK$1.0b company. That’s quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.
General Public Ownership
With a 24% ownership, the general public have some degree of sway over 1523. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We’ve spotted 2 warning signs for Plover Bay Technologies you should be aware of.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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.
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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. 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. Thank you for reading.