Key Insights
- Lisi Group (Holdings)'s significant insider ownership suggests inherent interests in company's expansion
- The top 3 shareholders own 57% of the company
- Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
If you want to know who really controls Lisi Group (Holdings) Limited (HKG:526), 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 57% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
As a result, insiders as a group endured the highest losses after market cap fell by HK$195m.
In the chart below, we zoom in on the different ownership groups of Lisi Group (Holdings).
See our latest analysis for Lisi Group (Holdings)
What Does The Lack Of Institutional Ownership Tell Us About Lisi Group (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 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. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Lisi Group (Holdings) might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.
Hedge funds don't have many shares in Lisi Group (Holdings). Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Lisi Group (Holdings)'s case, its Top Key Executive, Lixin Li, is the largest shareholder, holding 31% of shares outstanding. In comparison, the second and third largest shareholders hold about 16% and 9.0% of the stock.
To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.
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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Lisi Group (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.
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 most recent data indicates that insiders own the majority of Lisi Group (Holdings) Limited. This means they can collectively make decisions for the company. That means they own HK$856m worth of shares in the HK$1.5b company. That's quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.
General Public Ownership
With a 43% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Lisi Group (Holdings). While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Lisi Group (Holdings) better, we need to consider many other factors. Be aware that Lisi Group (Holdings) is showing 3 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...
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.