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A look at the shareholders of Lion Rock Group Limited (HKG:1127) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. 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.’
Lion Rock Group is a smaller company with a market capitalization of HK$1.1b, so it may still be flying under the radar of many institutional investors. In the chart below below, we can see that institutions are noticeable on the share registry. Let’s delve deeper into each type of owner, to discover more about 1127.
Check out our latest analysis for Lion Rock Group
What Does The Institutional Ownership Tell Us About Lion Rock Group?
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.
Lion Rock Group already has institutions on the share registry. Indeed, they own 11% of the company. This suggests some credibility amongst professional investors. But we can’t rely on that fact alone, since institutions make bad investments sometimes, just like everyone does. 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 Lion Rock Group, (below). Of course, keep in mind that there are other factors to consider, too.
We note that hedge funds don’t have a meaningful investment in Lion Rock Group. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Lion Rock 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.
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.
It seems insiders own a significant proportion of Lion Rock Group Limited. Insiders own HK$224m worth of shares in the HK$1.1b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.