Great week for China Education Group Holdings Limited (HKG:839) insiders who have 61% stake and they haven’t stopped buying

Key Insights

• Insiders appear to have a vested interest in China Education Group Holdings' growth, as seen by their sizeable ownership
• 61% of the business is held by the top 2 shareholders
• Insiders have been buying lately

If you want to know who really controls China Education Group Holdings Limited (HKG:839), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 61% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Our data shows that insiders recently bought shares in the company and they were rewarded after market cap rose HK$1.1b last week.

In the chart below, we zoom in on the different ownership groups of China Education Group Holdings.

View our latest analysis for China Education Group Holdings

What Does The Institutional Ownership Tell Us About China Education Group Holdings?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in China Education Group Holdings. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of China Education Group Holdings, (below). Of course, keep in mind that there are other factors to consider, too.

China Education Group Holdings is not owned by hedge funds. From our data, we infer that the largest shareholder is Guo Yu (who also holds the title of Top Key Executive) with 31% of shares outstanding. Its 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 play the role of a key stakeholder. With 31% and 1.5% of the shares outstanding respectively, Ketao Xie and The Vanguard Group, Inc. are the second and third largest shareholders. Interestingly, the second-largest shareholder, Ketao Xie is also Top Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 61% stake.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of China Education Group Holdings

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 China Education Group Holdings Limited stock. This gives them a lot of power. That means insiders have a very meaningful HK$6.8b stake in this HK$11b 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 24% stake in the company, and hence can't easily be ignored. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - China Education Group Holdings has 4 warning signs we think you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.