Is Wuling Motors Holdings Limited (HKG:305) Popular Amongst Insiders?

If you want to know who really controls Wuling Motors Holdings Limited (HKG:305), then you'll have to look at the makeup of its share registry. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. 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$7.2b, Wuling Motors Holdings is a decent size, so it is probably on the radar of institutional investors. Our analysis of the ownership of the company, below, shows that institutions don't own shares in the company. Let's delve deeper into each type of owner, to discover more about Wuling Motors Holdings.

View our latest analysis for Wuling Motors Holdings

What Does The Lack Of Institutional Ownership Tell Us About Wuling Motors Holdings?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Wuling Motors Holdings' earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Hedge funds don't have many shares in Wuling Motors Holdings. Looking at our data, we can see that the largest shareholder is Guangxi Automobile Holdings Limited with 61% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With 12% and 0.1% of the shares outstanding respectively, Shing Lee and Zhijun Yuan are the second and third largest shareholders. Interestingly, the bottom two of the top three shareholders also hold the title of Chief Executive Officer and Chairman of the Board, respectively, suggesting that these insiders have a personal stake in the company.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Wuling Motors Holdings

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own a reasonable proportion of Wuling Motors Holdings Limited. Insiders own HK$810m worth of shares in the HK$7.2b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public holds a 25% stake in Wuling Motors Holdings. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

It seems that Private Companies own 57%, of the Wuling Motors Holdings stock. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Wuling Motors Holdings better, we need to consider many other factors. Be aware that Wuling Motors Holdings is showing 4 warning signs in our investment analysis , and 3 of those can't be ignored...

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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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