Insiders of EuroEyes International Eye Clinic Limited (HKG:1846) must be disappointed as stock fell 11% after recent purchases

Key Insights

• Significant insider control over EuroEyes International Eye Clinic implies vested interests in company growth
• 56% of the company is held by a single shareholder (Jörn Jörgensen)
• Recent purchases by insiders

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If you want to know who really controls EuroEyes International Eye Clinic Limited (HKG:1846), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 65% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

A quick look at our data suggests that insiders have been buying shares in the company recently. However, with market cap down by HK$115m over the last week, their expectations were far from met.

In the chart below, we zoom in on the different ownership groups of EuroEyes International Eye Clinic.

See our latest analysis for EuroEyes International Eye Clinic

What Does The Institutional Ownership Tell Us About EuroEyes International Eye Clinic?

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.

Since institutions own only a small portion of EuroEyes International Eye Clinic, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

Hedge funds don't have many shares in EuroEyes International Eye Clinic. Looking at our data, we can see that the largest shareholder is the CEO Jörn Jörgensen with 56% of shares outstanding. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. Meanwhile, the second and third largest shareholders, hold 5.1% and 2.1%, of the shares outstanding, respectively. Interestingly, the third-largest shareholder, Jannik Jørgensen is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

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 a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of EuroEyes International Eye Clinic

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.

Our most recent data indicates that insiders own the majority of EuroEyes International Eye Clinic Limited. This means they can collectively make decisions for the company. So they have a HK$610m stake in this HK$946m 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

The general public-- including retail investors -- own 33% stake in the company, and hence can't 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for EuroEyes International Eye Clinic that you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.