Key Insights

• Star Shine Holdings Group's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 3 shareholders own 45% of the company
• Insiders have been selling lately

Every investor in Star Shine Holdings Group Limited (HKG:1440) should be aware of the most powerful shareholder groups. With 55% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 9.5% decrease in the stock price last week, individual investors suffered the most losses, but insiders who own 41% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of Star Shine Holdings Group.

What Does The Lack Of Institutional Ownership Tell Us About Star Shine Holdings 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 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. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Star Shine Holdings Group might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Star Shine Holdings Group is not owned by hedge funds. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Star Shine Holdings Group's case, its Top Key Executive, Wing Sing Tsoi, is the largest shareholder, holding 41% of shares outstanding. With 4.0% and 0.2% of the shares outstanding respectively, Deyong Investment Co., Ltd and Lam Ki Tsoi are the second and third largest shareholders. Interestingly, the third-largest shareholder, Lam Ki Tsoi is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

Our studies suggest that the top 3 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Star Shine Holdings Group

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.

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 information suggests that insiders maintain a significant holding in Star Shine Holdings Group Limited. It has a market capitalization of just HK$4.5b, and insiders have HK$1.8b worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 55% of Star Shine Holdings Group shares. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

We can see that Private Companies own 4.0%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Star Shine Holdings Group better, we need to consider many other factors. Take risks for example - Star Shine Holdings Group has 3 warning signs (and 1 which is concerning) we think you should know about.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com