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A look at the shareholders of Freetech Road Recycling Technology (Holdings) Limited (HKG:6888) can tell us which group is most powerful. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.
Freetech Road Recycling Technology (Holdings) is not a large company by global standards. It has a market capitalization of HK$230m, which means it wouldn't have the attention of many institutional investors. In the chart below below, we can see that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholder can tell us about 6888.
View our latest analysis for Freetech Road Recycling Technology (Holdings)
What Does The Institutional Ownership Tell Us About Freetech Road Recycling Technology (Holdings)?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
We can see that Freetech Road Recycling Technology (Holdings) does have institutional investors; and they hold 5.4% of the stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Freetech Road Recycling Technology (Holdings)'s historic earnings and revenue, below, but keep in mind there's always more to the story.
Freetech Road Recycling Technology (Holdings) is not owned by hedge funds. 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 Freetech Road Recycling Technology (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.