Espressif Systems (Shanghai) Co., Ltd. (SHSE:688018) insiders have significant skin in the game with 42% ownership

Key Insights

• Espressif Systems (Shanghai)'s significant insider ownership suggests inherent interests in company's expansion
• A total of 4 investors have a majority stake in the company with 50% ownership
• 26% of Espressif Systems (Shanghai) is held by Institutions

Every investor in Espressif Systems (Shanghai) Co., Ltd. (SHSE:688018) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 42% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

So it follows, every decision made by insiders of Espressif Systems (Shanghai) regarding the company's future would be crucial to them.

Let's take a closer look to see what the different types of shareholders can tell us about Espressif Systems (Shanghai).

See our latest analysis for Espressif Systems (Shanghai)

What Does The Institutional Ownership Tell Us About Espressif Systems (Shanghai)?

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.

As you can see, institutional investors have a fair amount of stake in Espressif Systems (Shanghai). This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Espressif Systems (Shanghai), (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Espressif Systems (Shanghai). Looking at our data, we can see that the largest shareholder is the CEO Swee Ann Teo with 42% of shares outstanding. With 2.8% and 2.7% of the shares outstanding respectively, Shinvest Holding Ltd. and Wisdomshire Asset Management Co., Ltd. are the second and third largest shareholders.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. 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 Espressif Systems (Shanghai)

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.

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 a reasonable proportion of Espressif Systems (Shanghai) Co., Ltd.. It has a market capitalization of just CN¥15b, and insiders have CN¥6.2b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 26% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 5.2%, of the Espressif Systems (Shanghai) stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Espressif Systems (Shanghai) better, we need to consider many other factors. Take risks for example - Espressif Systems (Shanghai) has 2 warning signs we think 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.