Every investor in Goldpac Group Limited (HKG: 3315) should know the most powerful shareholder groups. Large companies usually have institutions as shareholders, and we usually see insiders owning shares of small companies. I generally like to see some degree of insider ownership, even if it’s just a little. As Nassim Nicholas Taleb said, “Don’t tell me what you think, tell me what you have in your wallet.
The Goldpac group is not a large company by global standards. It has a market cap of HK $ 1.6 billion, which means it wouldn’t get the attention of many institutional investors. Our analysis of company ownership, below, shows that institutions are visible on the share register. Let’s take a closer look at what different types of shareholders can tell us about Goldpac Group.
Check out our latest analysis for Goldpac Group
What does institutional ownership tell us about the Goldpac group?
Institutional investors generally compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.
As you can see, institutional investors own a large part of the Goldpac group. This may indicate that the company has a certain degree of credibility in the investment community. However, it is better to be wary of relying on the so-called validation that comes with institutional investors. They too are sometimes wrong. When several institutions have a stock, there is always a risk that they are in a “crowded trade”. When such a trade goes awry, several parties may compete with each other to sell stocks quickly. This risk is higher in a company with no history of growth. You can see the historic Goldpac Group earnings and revenue below, but keep in mind that there is always more to tell.
We note that hedge funds do not have a significant investment in Goldpac Group. Because stocks speak louder than words, we consider it a good sign when insiders have a significant stake in a company. In the case of the Goldpac Group, its Top Key Executive, Run Ting Lu, is the main shareholder, holding 36% of the outstanding shares. With 18% and 5.8% respectively of the shares in circulation, Thales SA and Runyi Lu are the second and third shareholders. Interestingly, the third largest shareholder, Runyi Lu, is also a board member, again, indicating strong insider ownership among the major shareholders of the company. In addition, we found that Ping Hou, the CEO owns 1.4% of the shares allotted to his name.
After digging deeper, we found that the top 2 shareholders collectively control more than half of the shares of the company, implying that they have considerable power to influence the decisions of the company.
Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be achieved by studying the feelings of analysts. We are not resuming any analyst coverage of the stock at this time, so the company is unlikely to be widely held.
Insider ownership of the Goldpac Group
The definition of an insider may differ slightly from country to country, but board members still count. Management ultimately responds to the advice. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.
Most consider insider ownership to be positive because it can indicate that the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our information suggests that insiders retain a significant stake in Goldpac Group Limited. Insiders have a HK $ 718 million stake in the HK $ 1.6 billion company. I would say this shows alignment with shareholders, but it should be noted that the company is still quite small; some insiders may have founded the company. You can click here to see if these insiders have bought or sold.
General public property
The general public has a 32% stake in Goldpac Group. While this group may not necessarily call the spotlight, it certainly can have a real influence on the way the business is run.
Ownership of the public company
It seems to us that public companies own 18% of the Goldpac group. This can be of strategic interest and the two companies may have related business interests. They may have merged. This involvement is probably worth exploring.
While it is worth considering the different groups that own a business, other factors are even more important. Take, for example, the ubiquitous spectrum of investment risk. We have identified 2 warning signs with Goldpac Group (at least 1 that cannot be ignored), and understanding them should be part of your investment process.
Of course, you might find a fantastic investment looking elsewhere. So take a look at this free list of interesting companies.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month in which the balance sheet is dated. This may not be consistent with figures in annual reports.
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This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take into account your goals or your financial situation. We aim to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative information. Simply Wall St has no position in the mentioned stocks.
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