A look at the shareholders of Puyi Inc. (NASDAQ:PUYI) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 88% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And following last week's 11% decline in share price, insiders suffered the most losses.
Let's take a closer look to see what the different types of shareholders can tell us about Puyi.
Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.
There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. Alternatively, there might be something about the company that has kept institutional investors away. Puyi might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.
Puyi is not owned by hedge funds. Our data shows that Haifeng Yu is the largest shareholder with 88% of shares outstanding. This implies that they have majority interest control of the future of the company. Rhumbline Advisers Ltd Partnership is the second largest shareholder owning 0.02% of common stock, and Geode Capital Management, LLC holds about 0.02% of the company 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.
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Our most recent data indicates that insiders own the majority of Puyi Inc.. This means they can collectively make decisions for the company. That means they own US$276m worth of shares in the US$315m company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
The general public-- including retail investors -- own 12% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 3 warning signs we've spotted with Puyi .
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.