Every investor in AAC Technologies Holdings Inc. (HKG:2018) should know the most powerful shareholder groups. We can see that individual insiders hold the lion’s share of the company with 44% ownership. That is, the group will benefit the most if the stock goes up (or lose the most if there is a downturn).
And looking at our data, we can see that insiders have been buying stocks recently. Their expectations, however, were not met as the market capitalization fell to HK$32 billion over the past week.
Let’s take a closer look at what different types of shareholders can tell us about AAC Technologies Holdings.
See our latest analysis for AAC Technologies Holdings
What does institutional ownership tell us about AAC Technologies Holdings?
Institutional investors typically 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 sizeable portion of AAC Technologies Holdings. This suggests some credibility with professional investors. But we cannot rely solely on this fact since institutions sometimes make bad investments, like everyone else. It is not uncommon to see a sharp decline in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking out the past earnings trajectory of AAC Technologies Holdings (below). Of course, keep in mind that there are other factors to consider as well.
AAC Technologies Holdings is not owned by hedge funds. Our data shows that Chun Yuan Wu is the largest shareholder with 22% of shares outstanding. With 19% and 9.2% of shares outstanding, respectively, Zhengmin Pan and JPMorgan Chase & Co, Private Banking and Investment Banking Investments are the second and third largest shareholders. Zhengmin Pan, who is the second largest shareholder, also holds the title of general manager.
A more detailed study of the shareholder register showed us that 3 of the main shareholders hold a considerable stake in the company, via their 50% stake.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. A number of analysts cover the stock, so you can look at growth forecasts quite easily.
Insider ownership of AAC Technologies Holdings
The definition of an insider may differ slightly from country to country, but board members still matter. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.
Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
Our most recent data indicates that insiders own a reasonable proportion of AAC Technologies Holdings Inc. Insiders own HK$14 billion of shares in the HK$32 billion company. It is quite significant. Most would be delighted to see the board investing alongside them. You may want to access this free chart showing recent insider trades.
General public property
With a 27% stake, the general public, consisting primarily of individual investors, has some influence over AAC Technologies Holdings. This size of ownership, although considerable, may not be sufficient to change company policy if the decision is not in line with other major shareholders.
While it is worth considering the different groups that own a business, there are other, even more important factors. Take for example the ubiquitous specter of investment risk. We have identified 1 warning sign with AAC Technologies Holdings, and understanding them should be part of your investment process.
If you prefer to find out what analysts are predicting in terms of future growth, don’t miss this free analyst forecast report.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.