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IVD Medical Holding Limited's (HKG:1931) Top Holders Are Insiders and They Are Likely Disappointed by the Recent 20% Drop

Simply Wall St ·  02/22/2023 06:11

Key Insights

  • IVD Medical Holding's significant insider ownership suggests inherent interests in company's expansion
  • 59% of the business is held by the top 3 shareholders
  • Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of IVD Medical Holding Limited (HKG:1931) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 34% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders as a group endured the highest losses after market cap fell by HK$542m.

Let's delve deeper into each type of owner of IVD Medical Holding, beginning with the chart below.

See our latest analysis for IVD Medical Holding

ownership-breakdown
SEHK:1931 Ownership Breakdown February 21st 2023

What Does The Institutional Ownership Tell Us About IVD Medical Holding?

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.

IVD Medical Holding already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at IVD Medical Holding's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
SEHK:1931 Earnings and Revenue Growth February 21st 2023

IVD Medical Holding is not owned by hedge funds. Shinva Medical Instrument Co., Ltd. is currently the company's largest shareholder with 33% of shares outstanding. The second and third largest shareholders are King Sun Leung and Kuk Sing Ho, with an equal amount of shares to their name at 13%. Two of the top three shareholders happen to be Chief Operating Officer and Chairman of the Board, respectively. That is, insiders feature higher up in the heirarchy of the company's top shareholders.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 59% stake.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 IVD Medical Holding

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders maintain a significant holding in IVD Medical Holding Limited. It has a market capitalization of just HK$2.1b, and insiders have HK$735m worth of shares in their own names. We 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.

General Public Ownership

The general public-- including retail investors -- own 26% 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.

Public Company Ownership

It appears to us that public companies own 33% of IVD Medical Holding. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

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. For example, we've discovered 2 warning signs for IVD Medical Holding (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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