Every investor in Shengli Oil & Gas Pipe Holdings Limited (HKG:1080) should be aware of the most powerful shareholder groups. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, ‘Don’t tell me what you think, tell me what you have in your portfolio.’
With a market capitalization of HK$403m, Shengli Oil & Gas Pipe Holdings is a small cap stock, so it might not be well known by many institutional investors. Taking a look at our data on the ownership groups (below), it’s seems that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about 1080.
What Does The Institutional Ownership Tell Us About Shengli Oil & Gas Pipe Holdings?
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.
Shengli Oil & Gas Pipe Holdings already has institutions on the share registry. Indeed, they own 5.0% of the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Shengli Oil & Gas Pipe Holdings, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don’t have many shares in Shengli Oil & Gas Pipe Holdings. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Shengli Oil & Gas Pipe Holdings
The definition of company insiders can be subjective, and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 some shares in Shengli Oil & Gas Pipe Holdings Limited. In their own names, insiders own HK$39m worth of stock in the HK$403m company. It is good to see some investment by insiders, but I usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.
General Public Ownership
The general public, who are mostly retail investors, collectively hold 66% of Shengli Oil & Gas Pipe Holdings shares. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.
Private Company Ownership
We can see that Private Companies own 19%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it’s hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
It’s always worth thinking about the different groups who own shares in a company. But to understand Shengli Oil & Gas Pipe Holdings better, we need to consider many other factors.
I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.
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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