Big Tree Cloud Holdings Limited's (NASDAQ:DSY) most bullish insider, CEO Wenquan Zhu must be pleased with the recent 16% gain

Key Insights

• Big Tree Cloud Holdings' significant insider ownership suggests inherent interests in company's expansion
• The largest shareholder of the company is Wenquan Zhu with a 88% stake
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Big Tree Cloud Holdings Limited (NASDAQ:DSY), 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 88% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit US$118m market cap following a 16% gain in the stock.

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

Check out our latest analysis for Big Tree Cloud Holdings

What Does The Lack Of Institutional Ownership Tell Us About Big Tree Cloud 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 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. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Big Tree Cloud Holdings might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Big Tree Cloud Holdings is not owned by hedge funds. The company's CEO Wenquan Zhu is the largest shareholder with 88% of shares outstanding. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. For context, the second largest shareholder holds about 0.1% of the shares outstanding, followed by an ownership of 0.08% by the third-largest shareholder.

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 Big Tree Cloud Holdings

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Our information suggests that insiders own more than half of Big Tree Cloud Holdings Limited. This gives them effective control of the company. That means they own US$103m worth of shares in the US$118m company. That's quite meaningful. 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

With a 12% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Big Tree Cloud Holdings. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 4 warning signs for Big Tree Cloud Holdings you should know about.

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.