Insiders of Wai Kee Holdings Limited (HKG:610) must be disappointed as stock fell 12% after recent purchases

Key Insights

• Wai Kee Holdings' significant insider ownership suggests inherent interests in company's expansion
• A total of 2 investors have a majority stake in the company with 63% ownership
• Recent purchases by insiders

A look at the shareholders of Wai Kee Holdings Limited (HKG:610) can tell us which group is most powerful. The group holding the most number of shares in the company, around 63% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Notably, insiders have bought shares recently. Their expectations, however, were not satisfied, as the market cap dropped to HK$1.0b over the past week.

In the chart below, we zoom in on the different ownership groups of Wai Kee Holdings.

View our latest analysis for Wai Kee Holdings

What Does The Lack Of Institutional Ownership Tell Us About Wai Kee 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 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. Alternatively, there might be something about the company that has kept institutional investors away. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Wai Kee Holdings, for yourself, below.

We note that hedge funds don't have a meaningful investment in Wai Kee Holdings. The company's CEO Wei Peu Zen is the largest shareholder with 32% of shares outstanding. With 31% and 11% of the shares outstanding respectively, Wei Pao Zen and New World Development Company Limited are the second and third largest shareholders. Interestingly, the second-largest shareholder, Wei Pao Zen is also Top Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

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 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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Wai Kee Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 Wai Kee Holdings Limited. This means they can collectively make decisions for the company. So they have a HK$662m stake in this HK$1.0b 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-- including retail investors -- own 24% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

We can see that public companies hold 11% of the Wai Kee Holdings shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Wai Kee Holdings is showing 1 warning sign in our investment analysis , you should know about...

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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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.