Following recent decline, Highest Performances Holdings Inc.'s (NASDAQ:HPH) top shareholder CEO Yinan Hu sees holdings value drop by 4.2%

Key Insights

• Highest Performances Holdings' significant insider ownership suggests inherent interests in company's expansion
• The top 3 shareholders own 54% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Highest Performances Holdings Inc. (NASDAQ:HPH), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 47% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 4.2% decline in share price, insiders suffered the most losses.

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

Check out our latest analysis for Highest Performances Holdings

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

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 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. 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. Highest Performances Holdings might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

We note that hedge funds don't have a meaningful investment in Highest Performances Holdings. Looking at our data, we can see that the largest shareholder is the CEO Yinan Hu with 26% of shares outstanding. With 21% and 6.6% of the shares outstanding respectively, Haifeng Yu and Green Ease Holdings Limited are the second and third largest shareholders.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 54% stake.

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

Insider Ownership Of Highest Performances Holdings

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.

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.

It seems insiders own a significant proportion of Highest Performances Holdings Inc.. It has a market capitalization of just US$1.4b, and insiders have US$678m worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 41% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 12%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Highest Performances Holdings better, we need to consider many other factors. For instance, we've identified 2 warning signs for Highest Performances Holdings that you should be aware of.

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.

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