Do institutions own shares of Longfor Group Holdings Limited (HKG: 960)?
The large shareholder groups of Longfor Group Holdings Limited (HKG: 960) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares of small companies. I generally like to see some degree of insider ownership, even if it’s just a little. As Nassim Nicholas Taleb said, “Don’t tell me what you think, tell me what you have in your wallet.
Longfor Group Holdings has a market cap of HK $ 283 billion, so it’s too big to go under the radar. We expect institutions and retail investors to own some of the company. In the graph below, we can see that institutional investors bought the company. We can zoom in on the different ownership groups, to find out more about Longfor Group Holdings.
See our latest analysis for Longfor Group Holdings
What does institutional ownership tell us about Longfor Group Holdings?
Institutional investors generally compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.
Longfor Group Holdings already has institutions registered in the share register. Indeed, they hold a respectable stake in the company. This implies that the analysts working for these institutions have looked at the stock and they like it. But like anyone else, they could be wrong. When several institutions have a stock, there is always a risk that they are in a “crowded trade”. When such a trade goes awry, several parties may compete with each other to sell stocks quickly. This risk is higher in a company with no history of growth. You can see Longfor Group Holdings’ historic earnings and revenue below, but keep in mind that there is always more to do.
Longfor Group Holdings is not owned by hedge funds. Our data suggests that Yajun Wu, who is also the company’s Top Key Executive, owns the most shares with 43%. When an insider owns a significant share of a company’s stock, investors see it as a positive sign because it suggests that insiders are ready to tie up their wealth in the future of the company. For context, the second largest shareholder owns around 23% of the outstanding shares, followed by a 5.8% stake by the third largest shareholder. In addition, CEO Mingxiao Shao owns 0.6% of the shares of the company.
After digging deeper, we found that the top 2 shareholders collectively control more than half of the shares of the company, implying that they have considerable power to influence the decisions of the company.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand the expected performance of a stock. There are a reasonable number of analysts covering the stock, so it can be helpful to know their overall vision for the future.
Insider ownership of Longfor Group Holdings
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management responds to the board and the board must represent the interests of shareholders. Notably, sometimes the senior managers are themselves part of the board.
I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.
Our information suggests that insiders retain a significant stake in Longfor Group Holdings Limited. Insiders hold HK $ 139 billion in shares in the HK $ 283 billion company. It is quite significant. Most would be happy to see the board invest alongside them. You may want to access this free chart showing recent insider trades.
General public property
With a 14% stake, the general public has some influence over Longfor Group Holdings. While this group may not necessarily get it right, it can certainly have a real influence on the way the business is run.
Private company ownership
It appears that private companies own 23% of Longfor Group Holdings shares. Private companies can be related parties. Sometimes insiders have an interest in a public company through a stake in a private company, rather than in their own capacity as an individual. Although it is difficult to draw general conclusions, it should be noted as an additional area of research.
While it is worth considering the different groups that own a business, other factors are even more important. Take, for example, the ubiquitous spectrum of investment risk. We have identified 3 warning signs with Longfor Group Holdings, and understanding them should be part of your investment process.
Ultimately the future is the most important. You can access it free analyst forecast report for the company.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of the balance sheet date. This may not correspond to the figures in the annual reports.
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