Aceso Life Science Group Limited (HKG:474) insiders have had a fantastic week as stock increased 115%, and they haven't stopped buying

By
Simply Wall St
Published
April 22, 2022
SEHK:474
Source: Shutterstock

Every investor in Aceso Life Science Group Limited (HKG:474) should be aware of the most powerful shareholder groups. With 54% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Insiders who purchased recently should be particularly happy after the stock gained 115% in the past week.

In the chart below, we zoom in on the different ownership groups of Aceso Life Science Group.

View our latest analysis for Aceso Life Science Group

ownership-breakdown
SEHK:474 Ownership Breakdown April 22nd 2022

What Does The Institutional Ownership Tell Us About Aceso Life Science Group?

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.

Aceso Life Science Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Aceso Life Science Group, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
SEHK:474 Earnings and Revenue Growth April 22nd 2022

Aceso Life Science Group is not owned by hedge funds. Our data suggests that Shao Yu Li, who is also the company's Senior Key Executive, holds the most number of shares at 53%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. For context, the second largest shareholder holds about 11% of the shares outstanding, followed by an ownership of 5.6% by the third-largest shareholder.

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 Aceso Life Science 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 Aceso Life Science Group Limited stock. This gives them a lot of power. So they have a HK$442m stake in this HK$827m business. 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

With a 21% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Aceso Life Science Group. 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.

Private Company Ownership

Our data indicates that Private Companies hold 11%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Aceso Life Science Group better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Aceso Life Science 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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