Significant insider control over NIP Group implies vested interests in company growth
The top 5 shareholders own 56% of the company
Using data from company's past performance alongside ownership research, one can better assess the future performance of a company
If you want to know who really controls NIP Group Inc. (NASDAQ:NIPG), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 47% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.
In the chart below, we zoom in on the different ownership groups of NIP Group.
NasdaqGM:NIPG Ownership Breakdown October 27th 2024
What Does The Lack Of Institutional Ownership Tell Us About NIP Group?
We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.
There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. NIP Group'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.
NasdaqGM:NIPG Earnings and Revenue Growth October 27th 2024
NIP Group is not owned by hedge funds. With a 14% stake, CEO Ho Kwan Yau is the largest shareholder. In comparison, the second and third largest shareholders hold about 12% and 12% of the stock.
To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
Insider Ownership Of NIP Group
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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
It seems insiders own a significant proportion of NIP Group Inc.. It has a market capitalization of just US$398m, and insiders have US$186m worth of shares in their own names. We 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.
General Public Ownership
With a 41% ownership, the general public, mostly comprising of individual investors, have some degree of sway over NIP Group. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private Company Ownership
It seems that Private Companies own 12%, of the NIP Group stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for NIP Group you should know about.
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.
