Every investor in Tanwan Inc. (HKG:9890) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 61% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Our data shows that insiders recently bought shares in the company and they were rewarded after market cap rose HK$641m last week.
In the chart below, we zoom in on the different ownership groups of Tanwan.
View our latest analysis for Tanwan
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
Institutions have a very small stake in Tanwan. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.
We note that hedge funds don't have a meaningful investment in Tanwan. Looking at our data, we can see that the largest shareholder is the CEO Xubo Wu with 54% of shares outstanding. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. With 15% and 5.5% of the shares outstanding respectively, Trident Trust Group and Yang Chen are the second and third largest shareholders.
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.
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.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
It seems that insiders own more than half the Tanwan Inc. stock. This gives them a lot of power. That means insiders have a very meaningful HK$6.1b stake in this HK$10.0b business. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.
The general public, who are usually individual investors, hold a 23% stake in Tanwan. 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.
We can see that Private Companies own 15%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Tanwan is showing 1 warning sign in our investment analysis , 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.