The recent 243% gain must have brightened Top Key Executive Nangang Liao's week, Pak Tak International Limited's (HKG:2668) most bullish insider

Key Insights

• Insiders appear to have a vested interest in Pak Tak International's growth, as seen by their sizeable ownership
• A total of 4 investors have a majority stake in the company with 55% ownership
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Pak Tak International Limited (HKG:2668), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 55% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit HK$819m market cap following a 243% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Pak Tak International.

View our latest analysis for Pak Tak International

What Does The Institutional Ownership Tell Us About Pak Tak International?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Institutions have a very small stake in Pak Tak International. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Hedge funds don't have many shares in Pak Tak International. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Pak Tak International's case, its Top Key Executive, Nangang Liao, is the largest shareholder, holding 21% of shares outstanding. For context, the second largest shareholder holds about 15% of the shares outstanding, followed by an ownership of 13% by the third-largest shareholder. Interestingly, the third-largest shareholder, Jian Wang is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

On looking further, we found that 55% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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 Pak Tak International

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

It seems that insiders own more than half the Pak Tak International Limited stock. This gives them a lot of power. Given it has a market cap of HK$819m, that means they have HK$450m worth of shares. 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 42% 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Pak Tak International better, we need to consider many other factors. For instance, we've identified 3 warning signs for Pak Tak International (2 are significant) that you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.