After the recent decline, Vanov Holdings Company Limited (HKG:2260) Top Key Executive Genlian Shen's holdings have lost 20% of their value

Key Insights

• Significant insider control over Vanov Holdings implies vested interests in company growth
• Genlian Shen owns 56% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Vanov Holdings Company Limited (HKG:2260) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 74% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 20% decline in share price, insiders suffered the most losses.

Let's delve deeper into each type of owner of Vanov Holdings, beginning with the chart below.

See our latest analysis for Vanov Holdings

What Does The Lack Of Institutional Ownership Tell Us About Vanov 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 could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Vanov Holdings 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 Vanov Holdings. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Vanov Holdings' case, its Top Key Executive, Genlian Shen, is the largest shareholder, holding 56% of shares outstanding. With an ownership of 19%, the second largest shareholder is Jun Zhou, who also hold the title of Chief Executive Officer.

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. 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 Vanov Holdings

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. 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 Vanov Holdings Company Limited. This gives them effective control of the company. That means they own HK$594m worth of shares in the HK$798m company. That's quite meaningful. 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 26% stake in Vanov 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Vanov Holdings better, we need to consider many other factors. Take risks for example - Vanov Holdings has 2 warning signs (and 1 which is potentially serious) we think you should know about.

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.