Yuanda China Holdings Limited (HKG:2789) insiders have had a fantastic week as stock increased 82%, and they haven't stopped buying

Key Insights

• Yuanda China Holdings' significant insider ownership suggests inherent interests in company's expansion
• Baohua Kang owns 62% of the company
• Insiders have been buying lately

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If you want to know who really controls Yuanda China Holdings Limited (HKG:2789), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 71% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Insiders who purchased recently should be particularly happy after the stock gained 82% in the past week.

Let's take a closer look to see what the different types of shareholders can tell us about Yuanda China Holdings.

See our latest analysis for Yuanda China Holdings

What Does The Lack Of Institutional Ownership Tell Us About Yuanda China Holdings?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Yuanda China 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 Yuanda China Holdings. Our data suggests that Baohua Kang, who is also the company's Top Key Executive, holds the most number of shares at 62%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. Xiaofei Wang is the second largest shareholder owning 9.0% of common stock, and Hao Wang holds about 0.002% of the company stock. Interestingly, the third-largest shareholder, Hao Wang is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Yuanda China Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

It seems that insiders own more than half the Yuanda China Holdings Limited stock. This gives them a lot of power. So they have a HK$679m stake in this HK$950m business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 29% stake in Yuanda China Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Yuanda China Holdings you should know about.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.