Institutional investors in Kingdee International Software Group Company Limited (HKG:268) lost 5.0% last week but have reaped the benefits of longer-term growth

Key Insights

• Significantly high institutional ownership implies Kingdee International Software Group's stock price is sensitive to their trading actions
• The top 14 shareholders own 51% of the company
• Insiders have been selling lately

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

Every investor in Kingdee International Software Group Company Limited (HKG:268) should be aware of the most powerful shareholder groups. With 46% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Losing money on investments is something no shareholder enjoys, least of all institutional investors who saw their holdings value drop by 5.0% last week. However, the 86% one-year return to shareholders may have helped lessen their pain. They should, however, be mindful of further losses in the future.

Let's take a closer look to see what the different types of shareholders can tell us about Kingdee International Software Group.

Check out our latest analysis for Kingdee International Software Group

What Does The Institutional Ownership Tell Us About Kingdee International Software Group?

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.

As you can see, institutional investors have a fair amount of stake in Kingdee International Software Group. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Kingdee International Software Group, (below). Of course, keep in mind that there are other factors to consider, too.

Kingdee International Software Group is not owned by hedge funds. The company's CEO Shao Chun Xu is the largest shareholder with 20% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 5.0% of common stock, and China Asset Management Co. Ltd. holds about 4.9% of the company stock.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 14 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Kingdee International Software Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

Our most recent data indicates that insiders own a reasonable proportion of Kingdee International Software Group Company Limited. It is very interesting to see that insiders have a meaningful HK$12b stake in this HK$59b 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-- including retail investors -- own 34% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Kingdee International Software Group better, we need to consider many other factors. For instance, we've identified 1 warning sign for Kingdee International Software Group that you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.