The big shareholder groups in Kingkey Financial International (Holdings) Limited (HKG:1468) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.
Kingkey Financial International (Holdings) is a smaller company with a market capitalization of HK$3.5b, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have not yet purchased shares. Let's take a closer look to see what the different types of shareholders can tell us about Kingkey Financial International (Holdings).
What Does The Lack Of Institutional Ownership Tell Us About Kingkey Financial International (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 could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Kingkey Financial International (Holdings), for yourself, below.
Kingkey Financial International (Holdings) is not owned by hedge funds. Our data suggests that Jiajun Chen, who is also the company's Senior Key Executive, holds the most number of shares at 69%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. For context, the second largest shareholder holds about 0.8% of the shares outstanding, followed by an ownership of 0.3% by the third-largest shareholder. Interestingly, the second and third-largest shareholders also happen to be the Chief Compliance Officer and Member of the Board of Directors, respectively. This once again signifies considerable 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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Kingkey Financial International (Holdings)
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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 information suggests that insiders own more than half of Kingkey Financial International (Holdings) Limited. This gives them effective control of the company. So they have a HK$2.5b stake in this HK$3.5b 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 holds a 29% stake in Kingkey Financial International (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.
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - Kingkey Financial International (Holdings) has 3 warning signs (and 2 which are potentially serious) we think you should know about.
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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