The recent 16% gain must have brightened Top Key Executive Kangqiao Sang's week, Net-a-Go Technology Company Limited's (HKG:1483) most bullish insider

Key Insights

• Significant insider control over Net-a-Go Technology implies vested interests in company growth
• The top 3 shareholders own 50% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

Every investor in Net-a-Go Technology Company Limited (HKG:1483) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 51% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit HK$875m market cap following a 16% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about Net-a-Go Technology.

Check out our latest analysis for Net-a-Go Technology

What Does The Lack Of Institutional Ownership Tell Us About Net-a-Go Technology?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

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. Net-a-Go Technology 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 Net-a-Go Technology. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Net-a-Go Technology's case, its Top Key Executive, Kangqiao Sang, is the largest shareholder, holding 27% of shares outstanding. Yanying Ma is the second largest shareholder owning 15% of common stock, and Wenze Xu holds about 8.6% of the company stock. Interestingly, the third-largest shareholder, Wenze Xu is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Net-a-Go Technology

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. 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 information suggests that insiders own more than half of Net-a-Go Technology Company Limited. This gives them effective control of the company. That means they own HK$444m worth of shares in the HK$875m company. That's quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 49% stake in the company, and hence can't easily be ignored. 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.

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 for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Net-a-Go Technology , and understanding them should be part of your investment process.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.