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Every investor in China Chuanglian Education Financial Group Limited (HKG:2371) should be aware of the most powerful shareholder groups. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. 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.’
China Chuanglian Education Financial Group is not a large company by global standards. It has a market capitalization of HK$442.2m, which means it wouldn’t have the attention of many institutional investors. Taking a look at the our data on the ownership groups (below), it’s seems that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about 2371.
View our latest analysis for China Chuanglian Education Financial Group
What Does The Institutional Ownership Tell Us About China Chuanglian Education Financial Group?
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.
We can see that China Chuanglian Education Financial Group does have institutional investors; and they hold 7.3% of the stock. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of China Chuanglian Education Financial Group, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don’t have many shares in China Chuanglian Education Financial Group. As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of China Chuanglian Education Financial Group
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.