Do Insiders Own Lots Of Shares In Landing International Development Limited (HKG:582)?

By
Simply Wall St
Published
May 27, 2021
SEHK:582
Source: Shutterstock

The big shareholder groups in Landing International Development Limited (HKG:582) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

Landing International Development is not a large company by global standards. It has a market capitalization of HK$951m, which means it wouldn't have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutional investors have not yet purchased much of the company. Let's take a closer look to see what the different types of shareholders can tell us about Landing International Development.

See our latest analysis for Landing International Development

ownership-breakdown
SEHK:582 Ownership Breakdown May 28th 2021

What Does The Institutional Ownership Tell Us About Landing International Development?

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.

Less than 5% of Landing International Development is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

earnings-and-revenue-growth
SEHK:582 Earnings and Revenue Growth May 28th 2021

We note that hedge funds don't have a meaningful investment in Landing International Development. From our data, we infer that the largest shareholder is Zhihui Yang (who also holds the title of Top Key Executive) with 42% 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. With 3.9% and 2.4% of the shares outstanding respectively, Glory Sun Financial Group Limited and Jianhui Yao are the second and third largest shareholders.

On studying our ownership data, we found that 7 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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

Insider Ownership Of Landing International Development

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 insiders own a significant proportion of Landing International Development Limited. Insiders have a HK$423m stake in this HK$951m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public holds a substantial 50% stake in Landing International Development, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Public Company Ownership

We can see that public companies hold 3.9% of the Landing International Development shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Landing International Development better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Landing International Development (at least 1 which makes us a bit uncomfortable) , and understanding them should be part of your investment process.

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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