Stock Analysis

What Type Of Shareholders Own The Most Number of Neo Telemedia Limited (HKG:8167) Shares?

SEHK:8167
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If you want to know who really controls Neo Telemedia Limited (HKG:8167), then you'll have to look at the makeup of its share registry. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

Neo Telemedia is a smaller company with a market capitalization of HK$1.9b, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it seems 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 Neo Telemedia.

See our latest analysis for Neo Telemedia

ownership-breakdown
SEHK:8167 Ownership Breakdown December 23rd 2020

What Does The Lack Of Institutional Ownership Tell Us About Neo Telemedia?

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 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. Alternatively, there might be something about the company that has kept institutional investors away. 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 Neo Telemedia, for yourself, below.

earnings-and-revenue-growth
SEHK:8167 Earnings and Revenue Growth December 23rd 2020

Hedge funds don't have many shares in Neo Telemedia. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Neo Telemedia's case, its Top Key Executive, Haiquan Lie, is the largest shareholder, holding 45% of shares outstanding. In comparison, the second and third largest shareholders hold about 3.9% and 1.1% of the stock.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 Neo Telemedia

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Neo Telemedia Limited stock. This gives them a lot of power. Given it has a market cap of HK$1.9b, that means they have HK$963m worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, with a 49% 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 3 warning signs for Neo Telemedia (2 can't be ignored) that you should be aware of.

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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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. 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.
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