Insiders were the biggest winners as TROOPS, Inc.'s (NASDAQ:TROO) market cap grew by US$43m last week

Key Insights

• TROOPS' significant insider ownership suggests inherent interests in company's expansion
• A total of 2 investors have a majority stake in the company with 51% ownership
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

A look at the shareholders of TROOPS, Inc. (NASDAQ:TROO) can tell us which group is most powerful. With 53% stake, individual insiders possess the maximum shares in the company. 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$450m market cap following a 10% gain in the stock.

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

Check out our latest analysis for TROOPS

What Does The Lack Of Institutional Ownership Tell Us About TROOPS?

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

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. Alternatively, there might be something about the company that has kept institutional investors away. TROOPS' earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

TROOPS is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Kai Kai Kwok with 29% of shares outstanding. With 23% and 1.0% of the shares outstanding respectively, Chi-Yu Leung and Siu Lau are the second and third largest shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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

Insider Ownership Of TROOPS

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 TROOPS, Inc.. This gives them effective control of the company. That means they own US$240m worth of shares in the US$450m 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 46% ownership, the general public, mostly comprising of individual investors, have some degree of sway over TROOPS. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand TROOPS better, we need to consider many other factors. For instance, we've identified 3 warning signs for TROOPS (1 doesn't sit too well with us) that you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.