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The big shareholder groups in Telecom Service One Holdings Limited (HKG:3997) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. 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.’
Telecom Service One Holdings is a smaller company with a market capitalization of HK$400m, so it may still be flying under the radar of many institutional investors. In the chart below below, we can see that institutions are not on the share registry. Let’s delve deeper into each type of owner, to discover more about 3997.
Check out our latest analysis for Telecom Service One Holdings
What Does The Lack Of Institutional Ownership Tell Us About Telecom Service One Holdings?
Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it’s unusual to see larger companies without any institutional investors.
There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don’t own the stock because they aren’t convinced it will perform well. Telecom Service One Holdings’s earnings and revenue track record (below) may not be compelling to institutional investors — or they simply might not have looked at the business closely.
We note that hedge funds don’t have a meaningful investment in Telecom Service One Holdings. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Telecom Service One Holdings
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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 a reasonable proportion of Telecom Service One Holdings Limited. It has a market capitalization of just HK$400m, and insiders have HK$83m worth of shares in their own names. 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.