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The big shareholder groups in Ruixin International Holdings Limited (HKG:724) have power over the company. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of 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.’
Ruixin International Holdings is a smaller company with a market capitalization of HK$167m, so it may still be flying under the radar of many institutional investors. In the chart below below, we can see that institutions don’t own shares in the company. We can zoom in on the different ownership groups, to learn more about 724.
See our latest analysis for Ruixin International Holdings
What Does The Lack Of Institutional Ownership Tell Us About Ruixin International Holdings?
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 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. Alternatively, there might be something about the company that has kept institutional investors away. Ruixin International 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 Ruixin International Holdings. As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of Ruixin International Holdings
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.
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.
Our most recent data indicates that insiders own a reasonable proportion of Ruixin International Holdings Limited. Insiders have a HK$56m stake in this HK$167m business. I 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.