Key Insights

• Insiders appear to have a vested interest in Johnson Electric Holdings' growth, as seen by their sizeable ownership
• The largest shareholder of the company is Yik-Chun Wang Koo with a 65% stake
• Institutions own 22% of Johnson Electric Holdings

A look at the shareholders of Johnson Electric Holdings Limited (HKG:179) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 68% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders were the biggest beneficiaries of last week's 4.1% gain.

In the chart below, we zoom in on the different ownership groups of Johnson Electric Holdings.

What Does The Institutional Ownership Tell Us About Johnson Electric 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 Johnson Electric Holdings. 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. 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 Johnson Electric Holdings' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Johnson Electric Holdings. Yik-Chun Wang Koo is currently the company's largest shareholder with 65% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Schroder Investment Management (Singapore) Ltd. is the second largest shareholder owning 4.5% of common stock, and Federal Trust Company Ltd, Asset Management Arm holds about 3.1% of the company stock.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Johnson Electric Holdings

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 the majority of Johnson Electric Holdings Limited. This means they can collectively make decisions for the company. Insiders own HK$7.1b worth of shares in the HK$10b company. That's extraordinary! It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

The general public-- including retail investors -- own 10% stake in the company, and hence can't easily be ignored. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Johnson Electric Holdings better, we need to consider many other factors. For example, we've discovered 2 warning signs for Johnson Electric Holdings (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.