Following recent decline, China Education Group Holdings Limited's (HKG:839) top shareholder Top Key Executive Guo Yu sees holdings value drop by 4.9%

Key Insights

• China Education Group Holdings' significant insider ownership suggests inherent interests in company's expansion
• 59% of the business is held by the top 2 shareholders
• Institutional ownership in China Education Group Holdings is 13%

Every investor in China Education Group Holdings Limited (HKG:839) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 59% 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 4.9% decline in share price, insiders suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about China Education Group Holdings.

Check out our latest analysis for China Education Group Holdings

What Does The Institutional Ownership Tell Us About China Education Group 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.

We can see that China Education Group Holdings does have institutional investors; and they hold a good portion of the company's stock. 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 China Education Group Holdings' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in China Education Group Holdings. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In China Education Group Holdings' case, its Top Key Executive, Guo Yu, is the largest shareholder, holding 29% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 29% and 1.2%, of the shares outstanding, respectively. Interestingly, the second-largest shareholder, Ketao Xie is also Top Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of China Education Group 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.

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 most recent data indicates that insiders own the majority of China Education Group Holdings Limited. This means they can collectively make decisions for the company. That means insiders have a very meaningful HK$11b stake in this HK$19b business. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 29% 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 China Education Group Holdings better, we need to consider many other factors. For example, we've discovered 2 warning signs for China Education Group Holdings that you should be aware of before investing here.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.