Insiders are the top stockholders in C-Link Squared Limited (HKG:1463), and the recent 14% drop might have disappointed them

Key Insights

• C-Link Squared's significant insider ownership suggests inherent interests in company's expansion
• A total of 5 investors have a majority stake in the company with 53% ownership
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in C-Link Squared Limited (HKG:1463) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 58% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 14% decline in share price, insiders suffered the most losses.

Let's delve deeper into each type of owner of C-Link Squared, beginning with the chart below.

View our latest analysis for C-Link Squared

What Does The Lack Of Institutional Ownership Tell Us About C-Link Squared?

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 many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. 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. C-Link Squared might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

We note that hedge funds don't have a meaningful investment in C-Link Squared. Yaxian Wang is currently the largest shareholder, with 18% of shares outstanding. Xianlong Wu is the second largest shareholder owning 13% of common stock, and Cheng Zou holds about 9.9% of the company stock.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. 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 C-Link Squared

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.

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 information suggests that insiders own more than half of C-Link Squared Limited. This gives them effective control of the company. Given it has a market cap of HK$949m, that means they have HK$552m worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 42% stake in C-Link Squared. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand C-Link Squared better, we need to consider many other factors. Take risks for example - C-Link Squared has 3 warning signs (and 2 which are significant) we think 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.