Could The Goldin Financial Holdings Limited (HKG:530) Ownership Structure Tell Us Something Useful?

Every investor in Goldin Financial Holdings Limited (HKG:530) should be aware of the most powerful shareholder groups. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

Goldin Financial Holdings is a smaller company with a market capitalization of HK$2.5b, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions are not on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about Goldin Financial Holdings.

View our latest analysis for Goldin Financial Holdings

What Does The Lack Of Institutional Ownership Tell Us About Goldin Financial Holdings?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

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. 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. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Goldin Financial Holdings, for yourself, below.

We note that hedge funds don't have a meaningful investment in Goldin Financial Holdings. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Goldin Financial Holdings' case, its Top Key Executive, Sutong Pan, is the largest shareholder, holding 68% of shares outstanding. Goldin Real Estate Financial Holdings Limited is the second largest shareholder owning 2.7% of common stock, and Northern Trust Global Investments holds about 0.01% 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. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Goldin Financial Holdings

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems that insiders own more than half the Goldin Financial Holdings Limited stock. This gives them a lot of power. That means they own HK$1.7b worth of shares in the HK$2.5b company. That's quite meaningful. 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

The general public, with a 29% stake in the company, will not 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. For example, we've discovered 2 warning signs for Goldin Financial Holdings (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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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