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A look at the shareholders of IRC Limited (HKG:1029) can tell us which group is most powerful. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Companies that have been privatized tend to have low insider ownership.
IRC is a smaller company with a market capitalization of HK$589m, so it may still be flying under the radar of many institutional investors. In the chart below below, we can see that institutional investors have bought into the company. Let’s take a closer look to see what the different types of shareholder can tell us about 1029.
See our latest analysis for IRC
What Does The Institutional Ownership Tell Us About IRC?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
IRC already has institutions on the share registry. Indeed, they own 12% 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 IRC’s historic earnings and revenue, below, but keep in mind there’s always more to the story.
IRC is not owned by hedge funds. There is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of IRC
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.
Our most recent data indicates that insiders own some shares in IRC Limited. It has a market capitalization of just HK$589m, and insiders have HK$6.1m worth of shares, in their own names. This shows at least some alignment, but I usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.