The recent 7.5% gain must have brightened CEO Lixin Zhao's week, GalaxyCore Inc.'s (SHSE:688728) most bullish insider

Key Insights

• Significant insider control over GalaxyCore implies vested interests in company growth
• The top 2 shareholders own 53% of the company
• Institutions own 19% of GalaxyCore

To get a sense of who is truly in control of GalaxyCore Inc. (SHSE:688728), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 56% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders were the biggest beneficiaries of last week’s 7.5% gain.

In the chart below, we zoom in on the different ownership groups of GalaxyCore.

View our latest analysis for GalaxyCore

What Does The Institutional Ownership Tell Us About GalaxyCore?

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.

As you can see, institutional investors have a fair amount of stake in GalaxyCore. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see GalaxyCore's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in GalaxyCore. With a 41% stake, CEO Lixin Zhao is the largest shareholder. In comparison, the second and third largest shareholders hold about 12% and 6.8% of the stock.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 53% stake.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 GalaxyCore

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 information suggests that insiders own more than half of GalaxyCore Inc.. This gives them effective control of the company. That means insiders have a very meaningful CN¥24b stake in this CN¥43b business. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 12% 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

Our data indicates that Private Companies hold 13%, of the company's shares. 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 GalaxyCore better, we need to consider many other factors. Be aware that GalaxyCore is showing 3 warning signs in our investment analysis , and 1 of those is significant...

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.