The recent 13% gain must have brightened CEO Zejun Zhang's week, Natural Food International Holding Limited's (HKG:1837) most bullish insider
- Significant insider control over Natural Food International Holding implies vested interests in company growth
- A total of 2 investors have a majority stake in the company with 68% ownership
- Past performance of a company along with ownership data serve to give a strong idea about prospects for a business
If you want to know who really controls Natural Food International Holding Limited (HKG:1837), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 51% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Clearly, insiders benefitted the most after the company's market cap rose by HK$153m last week.
Let's delve deeper into each type of owner of Natural Food International Holding, beginning with the chart below.
See our latest analysis for Natural Food International Holding
What Does The Lack Of Institutional Ownership Tell Us About Natural Food International Holding?
Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.
There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Natural Food International Holding's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.
Natural Food International Holding is not owned by hedge funds. With a 42% stake, CEO Zejun Zhang is the largest shareholder. In comparison, the second and third largest shareholders hold about 26% and 8.4% of the stock.
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 is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of Natural Food International Holding
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
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.
Our most recent data indicates that insiders own the majority of Natural Food International Holding Limited. This means they can collectively make decisions for the company. So they have a HK$679m stake in this HK$1.3b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.
General Public Ownership
With a 23% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Natural Food International Holding. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Public Company Ownership
We can see that public companies hold 26% of the Natural Food International Holding shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.
It's always worth thinking about the different groups who own shares in a company. But to understand Natural Food International Holding better, we need to consider many other factors. Be aware that Natural Food International Holding is showing 1 warning sign in our investment analysis , you should know about...
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.
Natural Food International Holding
Natural Food International Holding Limited, an investment holding company, engages in the manufacturing, processing, and sale of natural health food products in the People’s Republic of China.
Flawless balance sheet and good value.