Chengjun Li Sprocomm Intelligence Limited's (HKG:1401) CEO is the most bullish insider, and their stock value gained 11%last week

Key Insights

• Insiders appear to have a vested interest in Sprocomm Intelligence's growth, as seen by their sizeable ownership
• A total of 2 investors have a majority stake in the company with 67% ownership
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

If you want to know who really controls Sprocomm Intelligence Limited (HKG:1401), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 67% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit HK$3.0b market cap following a 11% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about Sprocomm Intelligence.

View our latest analysis for Sprocomm Intelligence

What Does The Lack Of Institutional Ownership Tell Us About Sprocomm Intelligence?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

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. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Sprocomm Intelligence'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.

Sprocomm Intelligence is not owned by hedge funds. With a 37% stake, CEO Chengjun Li is the largest shareholder. In comparison, the second and third largest shareholders hold about 31% and 6.5% of the stock. Interestingly, the second-largest shareholder, Bin Xiong is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 67% stake.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Sprocomm Intelligence

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

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems that insiders own more than half the Sprocomm Intelligence Limited stock. This gives them a lot of power. Given it has a market cap of HK$3.0b, that means they have HK$2.0b worth of shares. 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, who are usually individual investors, hold a 26% stake in Sprocomm Intelligence. 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.

Private Company Ownership

Our data indicates that Private Companies hold 6.5%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Sprocomm Intelligence better, we need to consider many other factors. Take risks for example - Sprocomm Intelligence 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. 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.

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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.