Key Insights

• China Education Group Holdings' significant insider ownership suggests inherent interests in company's expansion
• 62% of the business is held by the top 2 shareholders
• Recent purchases by insiders

Every investor in China Education Group Holdings Limited (HKG:839) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 62% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

A quick look at our data suggests that insiders have been buying shares in the company recently. However, with shares price down 3.4% last week, they must be disappointed.

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

What Does The Institutional Ownership Tell Us About China Education Group Holdings?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in China Education Group Holdings. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at China Education Group Holdings' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in China Education Group Holdings. Our data shows that Ketao Xie is the largest shareholder with 31% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 31% and 1.4%, of the shares outstanding, respectively.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of China Education Group Holdings

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems that insiders own more than half the China Education Group Holdings Limited stock. This gives them a lot of power. That means insiders have a very meaningful HK$7.2b stake in this HK$12b business. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

With a 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over China Education Group Holdings. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand China Education Group Holdings better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for China Education Group Holdings you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.