Man Wah Holdings Limited's (HKG:1999) CEO Man Li Wong is the most upbeat insider, and their holdings increased by 5.8% last week

Key Insights

• Significant insider control over Man Wah Holdings implies vested interests in company growth
• 62% of the company is held by a single shareholder (Man Li Wong)
• 16% of Man Wah Holdings is held by Institutions

A look at the shareholders of Man Wah Holdings Limited (HKG:1999) 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. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit HK$18b market cap following a 5.8% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Man Wah Holdings.

See our latest analysis for Man Wah Holdings

What Does The Institutional Ownership Tell Us About Man Wah Holdings?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Man Wah Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Man Wah Holdings' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Man Wah Holdings. Looking at our data, we can see that the largest shareholder is the CEO Man Li Wong with 62% of shares outstanding. With such a huge stake, we infer that they have significant control of the future of the company. It's usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider with such skin in the game. For context, the second largest shareholder holds about 2.1% of the shares outstanding, followed by an ownership of 1.6% by the third-largest shareholder.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Man Wah Holdings

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.

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.

Our information suggests that insiders own more than half of Man Wah Holdings Limited. This gives them effective control of the company. Given it has a market cap of HK$18b, that means insiders have a whopping HK$12b worth of shares in their own names. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public, who are usually individual investors, hold a 21% stake in Man Wah Holdings. 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:

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 Man Wah Holdings is showing 1 warning sign in our investment analysis , you should know about...

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.