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The big shareholder groups in Neo Telemedia Limited (HKG:8167) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.’
Neo Telemedia is a smaller company with a market capitalization of HK$1.8b, so it may still be flying under the radar of many institutional investors. Taking a look at the our data on the ownership groups (below), it’s seems that institutions don’t own shares in the company. Let’s take a closer look to see what the different types of shareholder can tell us about 8167.
View our latest analysis for Neo Telemedia
What Does The Lack Of Institutional Ownership Tell Us About Neo Telemedia?
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 multiple explanations for why institutions don’t own a stock. The most common is that the company is too small relative to fund under management, so the institition does not bother to look closely at the company. It is also possible that fund managers don’t own the stock because they aren’t convinced it will perform well. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Neo Telemedia, for yourself, below.
Neo Telemedia is not owned by hedge funds. As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of Neo Telemedia
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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.
It seems insiders own a significant proportion of Neo Telemedia Limited. Insiders own HK$803m worth of shares in the HK$1.8b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
The general public — mostly retail investors — own 56% of Neo Telemedia . This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.