Every investor in China E-Information Technology Group Limited (HKG:8055) should be aware of the most powerful shareholder groups. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. We also tend to see lower insider ownership in companies that were previously publicly owned.
China E-Information Technology Group is a smaller company with a market capitalization of HK$143m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it’s seems that institutional investors have bought into the company. Let’s delve deeper into each type of owner, to discover more about China E-Information Technology Group.
What Does The Institutional Ownership Tell Us About China E-Information Technology 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.
China E-Information Technology Group already has institutions on the share registry. Indeed, they own 7.6% of 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It’s therefore worth looking at China E-Information Technology Group’s earnings history, below. Of course, the future is what really matters.
China E-Information Technology Group is not owned by hedge funds. China Shipbuilding Industry Corporation is currently the company’s largest shareholder with 14% of shares outstanding. Summit Blue Limited is the second largest shareholder with 9.0% of common stock, followed by Atlantis Investment Management (Hong Kong) Ltd., holding 7.6% of the stock.
A deeper look at our ownership data shows that the top 7 shareholders collectively hold less than 50% of the register, suggesting a large group of small holders where no one share holder has a majority.
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. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of China E-Information Technology Group
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
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 some shares in China E-Information Technology Group Limited. It has a market capitalization of just HK$143m, and insiders have HK$4.9m worth of shares, in their own names. This shows at least some alignment, but I usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, mostly retail investors, hold a substantial 66% stake in 8055, suggesting it is a fairly popular stock. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.
Private Company Ownership
Our data indicates that Private Companies hold 23%, of the company’s shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
It’s always worth thinking about the different groups who own shares in a company. But to understand China E-Information Technology Group better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We’ve identified 5 warning signs with China E-Information Technology Group (at least 2 which are concerning) , and understanding them should be part of your investment process.
Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.
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 firstname.lastname@example.org. 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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