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Every investor in China Dynamics (Holdings) Limited (HKG:476) should be aware of the most powerful shareholder groups. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies. Warren Buffett said that he likes ‘a business with enduring competitive advantages that is run by able and owner-oriented people’. So it’s nice to see some insider ownership, because it may suggest that management is owner-oriented.
China Dynamics (Holdings) is not a large company by global standards. It has a market capitalization of HK$624.5m, which means it wouldn’t have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have not yet purchased much of the company. We can zoom in on the different ownership groups, to learn more about 476.
Check out our latest analysis for China Dynamics (Holdings)
What Does The Lack Of Institutional Ownership Tell Us About China Dynamics (Holdings)?
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. It is also possible that fund managers don’t own the stock because they aren’t convinced it will perform well. China Dynamics (Holdings)’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.
We note that hedge funds don’t have a meaningful investment in China Dynamics (Holdings). Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of China Dynamics (Holdings)
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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our most recent data indicates that insiders own a reasonable proportion of China Dynamics (Holdings) Limited. Insiders own HK$210.0m worth of shares in the HK$624.5m company. I would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.