Insiders hold 73% of China Lesso Group Holdings Limited (HKG:2128), and they've been buying recently

Key Insights

• Significant insider control over China Lesso Group Holdings implies vested interests in company growth
• Luen Hei Wong owns 69% of the company
• Insiders have bought recently

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Every investor in China Lesso Group Holdings Limited (HKG:2128) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 73% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

Notably, insiders have bought shares recently. This could be interpreted as insiders anticipating a rise in stock prices in the near future.

In the chart below, we zoom in on the different ownership groups of China Lesso Group Holdings.

Check out our latest analysis for China Lesso Group Holdings

What Does The Institutional Ownership Tell Us About China Lesso Group Holdings?

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.

We can see that China Lesso Group Holdings does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 China Lesso Group Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in China Lesso Group Holdings. From our data, we infer that the largest shareholder is Luen Hei Wong (who also holds the title of Top Key Executive) with 69% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. Meanwhile, the second and third largest shareholders, hold 4.9% and 3.3%, of the shares outstanding, respectively. Interestingly, the third-largest shareholder, Manlun Zuo is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of China Lesso Group Holdings

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 the majority of China Lesso Group Holdings Limited. This means they can collectively make decisions for the company. Given it has a market cap of HK$15b, that means insiders have a whopping HK$11b worth of shares in their own names. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

With a 14% ownership, the general public, mostly comprising of individual investors, have some degree of sway over China Lesso Group Holdings. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we've identified 2 warning signs for China Lesso Group Holdings (1 makes us a bit uncomfortable) that 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.

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.