Public companies are Cheetah Mobile Inc.'s (NYSE:CMCM) biggest owners and were hit after market cap dropped US$17m

Key Insights

• Cheetah Mobile's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 2 shareholders own 61% of the company
• 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 Cheetah Mobile Inc. (NYSE:CMCM), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 61% to be precise, is public companies. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, public companies as a group endured the highest losses last week after market cap fell by US$17m.

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

Check out our latest analysis for Cheetah Mobile

What Does The Lack Of Institutional Ownership Tell Us About Cheetah Mobile?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

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

Cheetah Mobile is not owned by hedge funds. The company's largest shareholder is Kingsoft Corporation Limited, with ownership of 45%. Meanwhile, the second and third largest shareholders, hold 16% and 8.1%, of the shares outstanding, respectively. Sheng Fu, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

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 61% 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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Cheetah Mobile

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.

Shareholders would probably be interested to learn that insiders own shares in Cheetah Mobile Inc.. In their own names, insiders own US$10m worth of stock in the US$130m company. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 30% stake in the company, and hence can't easily be ignored. 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.

Public Company Ownership

We can see that public companies hold 61% of the Cheetah Mobile shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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 - Cheetah Mobile has 3 warning signs (and 2 which are significant) we think 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.

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