Key Insights
- Significant control over TOM Group by public companies implies that the general public has more power to influence management and governance-related decisions
- A total of 2 investors have a majority stake in the company with 61% ownership
- Insiders own 34% of TOM Group
Every investor in TOM Group Limited (HKG:2383) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are public companies with 36% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Following a 11% increase in the stock price last week, public companies profited the most, but insiders who own 34% stock also stood to gain from the increase.
Let's delve deeper into each type of owner of TOM Group, beginning with the chart below.
Check out our latest analysis for TOM Group
What Does The Lack Of Institutional Ownership Tell Us About TOM 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 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. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of TOM Group, for yourself, below.
Hedge funds don't have many shares in TOM Group. The company's largest shareholder is CK Hutchison Holdings Limited, with ownership of 36%. Hoi Shuen Chau is the second largest shareholder owning 25% of common stock, and Tian Lin holds about 8.6% of the company stock. Hoi Shuen Chau, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.
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.
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. 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 TOM 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.
It seems insiders own a significant proportion of TOM Group Limited. Insiders have a HK$663m stake in this HK$2.0b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 25% 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.
Private Company Ownership
We can see that Private Companies own 4.7%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Public Company Ownership
We can see that public companies hold 36% of the TOM Group shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with TOM Group , and understanding them should be part of your investment process.
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.