Key Insights

• Significant insider control over FriendTimes implies vested interests in company growth
• The largest shareholder of the company is Xiaohuang Jiang with a 57% stake
• Insiders have been buying lately

A look at the shareholders of FriendTimes Inc. (HKG:6820) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 57% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

A quick look at our data suggests that insiders have been buying shares in the company recently. So the news of stock price falling by 14% is not something they might have been expecting soon after purchasing shares.

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

See our latest analysis for FriendTimes

What Does The Institutional Ownership Tell Us About FriendTimes?

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.

FriendTimes 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. 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 FriendTimes' historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in FriendTimes. Looking at our data, we can see that the largest shareholder is the CEO Xiaohuang Jiang with 57% of shares outstanding. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. GIC Private Limited is the second largest shareholder owning 5.0% of common stock, and Purple Dream Holdings Limited holds about 3.0% of the company stock.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of FriendTimes

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own the majority of FriendTimes Inc.. This means they can collectively make decisions for the company. That means they own HK$1.6b worth of shares in the HK$2.7b company. That's quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 34% stake in FriendTimes. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand FriendTimes better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for FriendTimes (of which 1 shouldn't be ignored!) you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.

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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.