Key Insights
- China General Education Group's significant insider ownership suggests inherent interests in company's expansion
- The largest shareholder of the company is Sanping Niu with a 53% stake
- Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
Every investor in China General Education Group Limited (HKG:2175) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 74% 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 were the biggest beneficiaries of last week’s 23% gain.
In the chart below, we zoom in on the different ownership groups of China General Education Group.
Check out our latest analysis for China General Education Group
What Does The Lack Of Institutional Ownership Tell Us About China General Education Group?
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 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. China General Education Group's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.
China General Education Group is not owned by hedge funds. Our data shows that Sanping Niu is the largest shareholder with 53% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. In comparison, the second and third largest shareholders hold about 22% and 0.01% of the stock.
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 China General Education Group
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 China General Education Group Limited. This means they can collectively make decisions for the company. So they have a HK$1.2b stake in this HK$1.7b business. 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
The general public-- including retail investors -- own 26% 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.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand China General Education Group better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for China General Education Group you should know about.
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.