Fenbo Holdings Limited's (NASDAQ:FEBO) Senior Key Executive Kin Shing Li is the most upbeat insider, and their holdings increased by 25% last week

Key Insights

• Insiders appear to have a vested interest in Fenbo Holdings' growth, as seen by their sizeable ownership
• The largest shareholder of the company is Kin Shing Li with a 72% stake
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

A look at the shareholders of Fenbo Holdings Limited (NASDAQ:FEBO) can tell us which group is most powerful. The group holding the most number of shares in the company, around 81% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit US$157m market cap following a 25% gain in the stock.

Let's delve deeper into each type of owner of Fenbo Holdings, beginning with the chart below.

Check out our latest analysis for Fenbo Holdings

What Does The Lack Of Institutional Ownership Tell Us About Fenbo Holdings?

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 many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. 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. Fenbo Holdings might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Fenbo Holdings is not owned by hedge funds. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Fenbo Holdings' case, its Senior Key Executive, Kin Shing Li, is the largest shareholder, holding 72% of shares outstanding. The second and third largest shareholders are Ming Pang Fung and Tong Lam Yuk, with an equal amount of shares to their name at 4.5%.

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. 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 Fenbo Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 information suggests that insiders own more than half of Fenbo Holdings Limited. This gives them effective control of the company. That means they own US$128m worth of shares in the US$157m company. That's quite meaningful. 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

With a 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Fenbo Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Fenbo Holdings has 2 warning signs we think 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. 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.

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