South Manganese Investment Limited (HKG:1091) insiders still own 51% despite recent sales, but recent decline may have cost them

Key Insights

• Insiders appear to have a vested interest in South Manganese Investment's growth, as seen by their sizeable ownership
• The top 3 shareholders own 53% of the company
• Recent sales by insiders

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

A look at the shareholders of South Manganese Investment Limited (HKG:1091) can tell us which group is most powerful. With 51% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And our data suggests that insiders own the top position in the company’s share registry despite recent sales. Following last week's 12% decline in share price, the group also suffered the most losses.

In the chart below, we zoom in on the different ownership groups of South Manganese Investment.

See our latest analysis for South Manganese Investment

What Does The Lack Of Institutional Ownership Tell Us About South Manganese Investment?

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 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. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. South Manganese Investment'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.

South Manganese Investment is not owned by hedge funds. Mingwen Sun is currently the largest shareholder, with 20% of shares outstanding. Xuming Chen is the second largest shareholder owning 17% of common stock, and Guangxi Dameng Manganese Industry Group Co., Ltd. holds about 16% of the company stock.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of South Manganese Investment

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.

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.

It seems that insiders own more than half the South Manganese Investment Limited stock. This gives them a lot of power. Given it has a market cap of HK$2.0b, that means they have HK$1.1b worth of shares. 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

The general public, who are usually individual investors, hold a 32% stake in South Manganese Investment. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 16%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand South Manganese Investment better, we need to consider many other factors. For instance, we've identified 4 warning signs for South Manganese Investment (2 make us uncomfortable) that you should be aware of.

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.

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

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.