Key Insights

• Hongkong and Shanghai Hotels' significant insider ownership suggests inherent interests in company's expansion
• The largest shareholder of the company is Michael David Kadoorie with a 51% stake
• 17% of Hongkong and Shanghai Hotels is held by Institutions

A look at the shareholders of The Hongkong and Shanghai Hotels, Limited (HKG:45) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 57% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, insiders endured the biggest losses as the stock fell by 4.1%.

In the chart below, we zoom in on the different ownership groups of Hongkong and Shanghai Hotels.

What Does The Institutional Ownership Tell Us About Hongkong and Shanghai Hotels?

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.

Hongkong and Shanghai Hotels already has institutions on the share registry. Indeed, they own a respectable stake in 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. 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 Hongkong and Shanghai Hotels' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Hongkong and Shanghai Hotels. Our data shows that Michael David Kadoorie is the largest shareholder with 51% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. For context, the second largest shareholder holds about 16% of the shares outstanding, followed by an ownership of 5.1% by the third-largest shareholder.

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

Insider Ownership Of Hongkong and Shanghai Hotels

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 that insiders own more than half the The Hongkong and Shanghai Hotels, Limited stock. This gives them a lot of power. Insiders own HK$5.6b worth of shares in the HK$9.9b company. That's extraordinary! 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

The general public, who are usually individual investors, hold a 21% stake in Hongkong and Shanghai Hotels. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Public Company Ownership

We can see that public companies hold 5.1% of the Hongkong and Shanghai Hotels shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Hongkong and Shanghai Hotels (of which 2 are concerning!) 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.