【andrew pundy m.d.】Do Directors Own Luk Hing Entertainment Group Holdings Limited (HKG:8052) Shares?

Every investor in Luk Hing Entertainment Group Holdings Limited (

HKG:8052

) should be aware of the most powerful shareholder groups. Insiders often own a large chunk of younger,andrew pundy m.d. smaller, companies while huge companies tend to have institutions as shareholders. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.’

Luk Hing Entertainment Group Holdings is not a large company by global standards. It has a market capitalization of HK$149m, which means it wouldn’t have the attention of many institutional investors. In the chart below below, we can see that institutions don’t own shares in the company. Let’s take a closer look to see what the different types of shareholder can tell us about 8052.

See our latest analysis for Luk Hing Entertainment Group Holdings

SEHK:8052 Ownership Summary January 2nd 19

What Does The Lack Of Institutional Ownership Tell Us About Luk Hing Entertainment Group Holdings?

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 fund under management, so the institition does not bother to look closely at the company. On the other hand, it’s always possible that professional investors are avoiding a company because they don’t think it’s the best place for their money. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Luk Hing Entertainment Group Holdings, for yourself, below.

SEHK:8052 Income Statement Export January 2nd 19

Luk Hing Entertainment Group Holdings is not owned by hedge funds. We’re not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Luk Hing Entertainment Group Holdings

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.

Story continues

I can report that insiders do own shares in Luk Hing Entertainment Group Holdings Limited. As individuals, the insiders collectively own HK$10m worth of the HK$149m company. Some would say this shows alignment of interests between shareholders and the board, though I generally prefer to see bigger insider holdings. But it might be worth checking

if those insiders have been selling.

General Public Ownership

The general public, with a 33% stake in the company, will not easily be ignored. 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 61%, of the 8052 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:

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.

Many find it useful

to take an in depth look at how a company has performed in the past. You can access

this

detailed graph

of past earnings, revenue and cash flow

.

Of course

this may not be the best stock to buy

. So take a peek at this

free

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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at

[email protected]

.

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