Insiders of Changsha Broad Homes Industrial Group Co., Ltd. (HKG:2163) were rewarded after last week’s 16% gain

Key Insights

• Changsha Broad Homes Industrial Group's significant insider ownership suggests inherent interests in company's expansion
• The top 2 shareholders own 56% of the company
• Insiders have bought recently

A look at the shareholders of Changsha Broad Homes Industrial Group Co., Ltd. (HKG:2163) can tell us which group is most powerful. With 47% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

A quick look at our data suggests that insiders have been buying shares in the company recently and their bets paid off last week after the stock gained 16%.

In the chart below, we zoom in on the different ownership groups of Changsha Broad Homes Industrial Group.

View our latest analysis for Changsha Broad Homes Industrial Group

What Does The Institutional Ownership Tell Us About Changsha Broad Homes Industrial Group?

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.

We can see that Changsha Broad Homes Industrial Group does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Changsha Broad Homes Industrial Group's 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 Changsha Broad Homes Industrial Group. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Changsha Broad Homes Industrial Group's case, its Top Key Executive, Jian Zhang, is the largest shareholder, holding 45% of shares outstanding. Hunan Chasing Fund Management Co., Ltd is the second largest shareholder owning 10% of common stock, and Shenzhen CMAF Management Co., Ltd. holds about 5.2% of the company stock.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Changsha Broad Homes Industrial Group

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.

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 a reasonable proportion of Changsha Broad Homes Industrial Group Co., Ltd.. Insiders have a HK$578m stake in this HK$1.2b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 23% stake in Changsha Broad Homes Industrial Group. 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 Equity Ownership

Private equity firms hold a 15% stake in Changsha Broad Homes Industrial Group. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

It seems that Private Companies own 5.7%, of the Changsha Broad Homes Industrial Group stock. 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.

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. Take risks for example - Changsha Broad Homes Industrial Group has 1 warning sign we think you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.