Is Sino Gas Holdings Group Limited (HKG:1759) Popular Amongst Insiders?

Every investor in Sino Gas Holdings Group Limited (HKG:1759) should be aware of the most powerful shareholder groups. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

Sino Gas Holdings Group is not a large company by global standards. It has a market capitalization of HK$886m, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutions are not on the share registry. We can zoom in on the different ownership groups, to learn more about Sino Gas Holdings Group.

Check out our latest analysis for Sino Gas Holdings Group

What Does The Lack Of Institutional Ownership Tell Us About Sino Gas Holdings Group?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

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. Alternatively, there might be something about the company that has kept institutional investors away. Sino Gas Holdings Group'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.

Sino Gas Holdings Group is not owned by hedge funds. J&Y Family Trust is currently the largest shareholder, with 56% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With an ownership of 19%, the second largest shareholder is Guang Ji, who also hold the title of Chief Executive Officer.

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

Insider Ownership Of Sino Gas Holdings Group

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.

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 most recent data indicates that insiders own a reasonable proportion of Sino Gas Holdings Group Limited. It has a market capitalization of just HK$886m, and insiders have HK$166m worth of shares in their own names. I would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, with a 25% stake in the company, will not easily be ignored. 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.

Private Company Ownership

Our data indicates that Private Companies hold 56%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

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. Be aware that Sino Gas Holdings Group is showing 4 warning signs in our investment analysis , and 2 of those are potentially serious...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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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