Every investor in Guangzhou Rural Commercial Bank Co., Ltd. (HKG:1551) should be aware of the most powerful shareholder groups. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, ‘Don’t tell me what you think, tell me what you have in your portfolio.’
Guangzhou Rural Commercial Bank is a pretty big company. It has a market capitalization of HK$47b. Normally institutions would own a significant portion of a company this size. Our analysis of the ownership of the company, below, shows that institutions are not really that prevalent on the share registry. Let’s delve deeper into each type of owner, to discover more about 1551.
What Does The Institutional Ownership Tell Us About Guangzhou Rural Commercial Bank?
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.
Less than 5% of Guangzhou Rural Commercial Bank is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.
Hedge funds don’t have many shares in Guangzhou Rural Commercial Bank. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Guangzhou Rural Commercial Bank
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 Guangzhou Rural Commercial Bank Co., Ltd.. This is a big company, so it is good to see this level of alignment. Insiders own HK$4.7b worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public — mostly retail investors — own 59% of Guangzhou Rural Commercial Bank . 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 25%, of the company’s shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it’s hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
It’s always worth thinking about the different groups who own shares in a company. But to understand Guangzhou Rural Commercial Bank better, we need to consider many other factors.
I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free .
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.
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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. Thank you for reading.