Want to participate in a research study? Help shape the future of investing tools and earn a $60 gift card!

The big shareholder groups in Crocodile Garments Limited (HKG:122) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.'

Crocodile Garments is not a large company by global standards. It has a market capitalization of HK$701m, which means it wouldn't have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. Let's take a closer look to see what the different types of shareholder can tell us about 122.

See our latest analysis for Crocodile Garments

What Does The Institutional Ownership Tell Us About Crocodile Garments?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Crocodile Garments already has institutions on the share registry. Indeed, they own 7.0% of the company. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Crocodile Garments's historic earnings and revenue, below, but keep in mind there's always more to the story.

It looks like hedge funds own 6.0% of Crocodile Garments shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Crocodile Garments

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.