Is Country Garden Services Holdings Company Limited (HKG:6098) Popular Amongst Insiders?

Every investor in Country Garden Services Holdings Company Limited (HKG:6098) 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. 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$153b, Country Garden Services Holdings is rather large. We’d expect to see institutional investors on the register. Companies of this size are usually well known to retail investors, too. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about Country Garden Services Holdings.

Check out our latest analysis for Country Garden Services Holdings

ownership-breakdown
SEHK:6098 Ownership Breakdown August 29th 2020

What Does The Institutional Ownership Tell Us About Country Garden Services Holdings?

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.

We can see that Country Garden Services Holdings does have institutional investors; and they hold a good portion of the company’s stock. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Country Garden Services Holdings, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
SEHK:6098 Earnings and Revenue Growth August 29th 2020

We note that hedge funds don’t have a meaningful investment in Country Garden Services Holdings. The company’s CEO Huiyan Yang is the largest shareholder with 53% of shares outstanding. With such a huge stake, we infer that they have significant control of the future of the company. It’s usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we’re glad to see a company insider with such skin in the game. With 1.6% and 1.5% of the shares outstanding respectively, The Vanguard Group, Inc. and J.P. Morgan Asset Management, Inc. are the second and third largest shareholders.

Researching institutional ownership is a good way to gauge and filter a stock’s expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Country Garden Services Holdings

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 most recent data indicates that insiders own the majority of Country Garden Services Holdings Company Limited. This means they can collectively make decisions for the company. Insiders own HK$81b worth of shares in the HK$153b company. That’s extraordinary! Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public holds a 33% stake in Country Garden Services Holdings. 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. For example, we’ve discovered 3 warning signs for Country Garden Services Holdings that you should be aware of before investing here.

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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