Key Insights

• Significant insider control over Arta TechFin implies vested interests in company growth
• 73% of the company is held by a single shareholder (Chi-Kong Cheng)
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Arta TechFin Corporation Limited (HKG:279), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 73% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit HK$938m market cap following a 104% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about Arta TechFin.

What Does The Lack Of Institutional Ownership Tell Us About Arta TechFin?

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 multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Arta TechFin might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Arta TechFin is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Chi-Kong Cheng with 73% of shares outstanding. This implies that they have majority interest control of the future of the company. Meanwhile, the second largest shareholder is Gain Bright Limited holding 5.9%.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Arta TechFin

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 the majority of Arta TechFin Corporation Limited. This means they can collectively make decisions for the company. So they have a HK$687m stake in this HK$938m business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 21% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Arta TechFin. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 5.9%, of the Arta TechFin stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 3 warning signs for Arta TechFin you should be aware of, and 2 of them shouldn't be ignored.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.