Insiders still control 59% of Bright Smart Securities & Commodities Group Limited (HKG:1428) despite recent sales

Key Insights

• Insiders appear to have a vested interest in Bright Smart Securities & Commodities Group's growth, as seen by their sizeable ownership
• 59% of the company is held by a single shareholder (Mow Lum Yip)
• Insiders have sold recently

To get a sense of who is truly in control of Bright Smart Securities & Commodities Group Limited (HKG:1428), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 59% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Despite recent sales, insiders own the most shares in the company. As a result, they stand to gain the most after the stock gained 14% in the past week.

In the chart below, we zoom in on the different ownership groups of Bright Smart Securities & Commodities Group.

See our latest analysis for Bright Smart Securities & Commodities Group

What Does The Lack Of Institutional Ownership Tell Us About Bright Smart Securities & Commodities Group?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. Alternatively, there might be something about the company that has kept institutional investors away. Bright Smart Securities & Commodities Group might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Hedge funds don't have many shares in Bright Smart Securities & Commodities Group. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Bright Smart Securities & Commodities Group's case, its Top Key Executive, Mow Lum Yip, is the largest shareholder, holding 59% of shares outstanding. Dimensional Fund Advisors LP is the second largest shareholder owning 0.4% of common stock, and American Century Investment Management Inc holds about 0.3% of the company stock.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Bright Smart Securities & Commodities Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 Bright Smart Securities & Commodities Group Limited stock. This gives them a lot of power. So they have a HK$1.6b stake in this HK$2.7b business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Bright Smart Securities & Commodities Group. 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 Bright Smart Securities & Commodities Group better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Bright Smart Securities & Commodities Group , and understanding them should be part of your investment process.

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.