Yahoo Finance Owning 37% in Futu Holdings Limited (NASDAQ:FUTU) means that insiders are heavily invested in the company's future
Key Insights
Futu Holdings' significant insider ownership suggests inherent interests in company's expansion
A total of 2 investors have a majority stake in the company with 59% ownership
A look at the shareholders of Futu Holdings Limited (NASDAQ:FUTU) can tell us which group is most powerful. The group holding the most number of shares in the company, around 37% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).
So it follows, every decision made by insiders of Futu Holdings regarding the company's future would be crucial to them.
Let's take a closer look to see what the different types of shareholders can tell us about Futu Holdings.
See our latest analysis for Futu Holdings
What Does The Institutional Ownership Tell Us About Futu 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.
Futu Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Futu Holdings' earnings history below. Of course, the future is what really matters.
Futu Holdings is not owned by hedge funds. With a 37% stake, CEO Hua Li is the largest shareholder. Tencent Holdings Limited is the second largest shareholder owning 22% of common stock, and Aspex Management (HK) Limited holds about 3.1% of the company stock.
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 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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Futu 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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
It seems insiders own a significant proportion of Futu Holdings Limited. It has a market capitalization of just US$11b, and insiders have US$3.9b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.
General Public Ownership
With a 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Futu Holdings. 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
It appears to us that public companies own 22% of Futu Holdings. 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.
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.
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.
