Insiders still own 64% of PW Medtech Group Limited (HKG:1358) despite recent sales

Key Insights

• Significant insider control over PW Medtech Group implies vested interests in company growth
• The top 2 shareholders own 63% of the company
• Insiders have sold recently

If you want to know who really controls PW Medtech Group Limited (HKG:1358), then you'll have to look at the makeup of its share registry. With 64% stake, individual insiders possess the maximum shares in the company. 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 12% in the past week.

In the chart below, we zoom in on the different ownership groups of PW Medtech Group.

See our latest analysis for PW Medtech Group

What Does The Institutional Ownership Tell Us About PW Medtech Group?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in PW Medtech Group. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see PW Medtech Group's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in PW Medtech Group. The company's largest shareholder is Yufeng Liu, with ownership of 37%. Meanwhile, the second and third largest shareholders, hold 26% and 5.0%, of the shares outstanding, respectively.

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.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of PW Medtech Group

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. 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 PW Medtech Group Limited. This means they can collectively make decisions for the company. So they have a HK$1.1b stake in this HK$1.8b 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 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over PW Medtech Group. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand PW Medtech Group better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for PW Medtech Group you should know about.

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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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com