How Much Of China Oceanwide Holdings Limited (HKG:715) Do Institutions Own?

By
Simply Wall St
Published
May 15, 2020
SEHK:715

The big shareholder groups in China Oceanwide Holdings Limited (HKG:715) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Companies that have been privatized tend to have low insider ownership.

China Oceanwide Holdings is a smaller company with a market capitalization of HK$4.0b, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about China Oceanwide Holdings.

View our latest analysis for China Oceanwide Holdings

SEHK:715 Ownership Summary May 16th 2020
SEHK:715 Ownership Summary May 16th 2020

What Does The Institutional Ownership Tell Us About China Oceanwide Holdings?

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.

China Oceanwide Holdings already has institutions on the share registry. Indeed, they own 5.2% of the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at China Oceanwide Holdings's earnings history, below. Of course, the future is what really matters.

SEHK:715 Income Statement May 16th 2020
SEHK:715 Income Statement May 16th 2020

China Oceanwide Holdings is not owned by hedge funds. Tonghai Holdings Co., Ltd is currently the company's largest shareholder with 75% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Next, we have HFT Investment Management Co., Ltd. and Kwok Po as the second and third largest shareholders, holding 5.1% and 4.8%, of the shares outstanding, respectively.

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. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of China Oceanwide Holdings

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.

We can see that insiders own shares in China Oceanwide Holdings Limited. It has a market capitalization of just HK$4.0b, and insiders have HK$196m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public holds a 15% stake in 715. 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

We can see that Private Companies own 75%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that China Oceanwide Holdings is showing 3 warning signs in our investment analysis , and 2 of those can't be ignored...

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

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