The recent 11% gain must have brightened Top Key Executive Yoong An Yang's week, Jia Yao Holdings Limited's (HKG:1626) most bullish insider

Key Insights

• Jia Yao Holdings' significant insider ownership suggests inherent interests in company's expansion
• 70% of the company is held by a single shareholder (Yoong An Yang)
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

Every investor in Jia Yao Holdings Limited (HKG:1626) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 70% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week’s 11% gain.

Let's delve deeper into each type of owner of Jia Yao Holdings, beginning with the chart below.

See our latest analysis for Jia Yao Holdings

What Does The Lack Of Institutional Ownership Tell Us About Jia Yao 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. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Jia Yao Holdings' earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Jia Yao Holdings is not owned by hedge funds. From our data, we infer that the largest shareholder is Yoong An Yang (who also holds the title of Top Key Executive) with 70% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder.

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. 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 Jia Yao Holdings

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 Jia Yao Holdings Limited. This means they can collectively make decisions for the company. Given it has a market cap of HK$2.9b, that means they have HK$2.1b worth of shares. 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, who are usually individual investors, hold a 30% stake in Jia Yao Holdings. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Jia Yao Holdings better, we need to consider many other factors. For example, we've discovered 3 warning signs for Jia Yao Holdings (2 make us uncomfortable!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.