Do insiders own a lot of shares in Lenovo Group Limited (HKG: 992)?

Every investor in Lenovo Group Limited (HKG: 992) should know about the most powerful shareholder groups. Generally speaking, as a business grows, institutions increase their participation. Conversely, insiders often decrease their ownership over time. I generally like to see some degree of insider ownership, even if it’s just a little. As Nassim Nicholas Taleb said, “Don’t tell me what you think, tell me what you have in your wallet.

The Lenovo group is a fairly large company. It has a market capitalization of HK $ 93 billion. Normally, institutions would own a significant share of a company of this size. Looking at our data on ownership groups (below), it looks like institutional investors bought the company. Let’s dig deeper into each type of owner to learn more about Lenovo Group.

See our latest analysis for the Lenovo group

SEHK: 992 Distribution of ownership on October 19, 2021

What does institutional ownership tell us about the Lenovo group?

Many institutions measure their performance against an index that approximates the local market. Thus, they generally pay more attention to companies that are included in the major indices.

We can see that Lenovo Group has institutional investors; and they own a large portion of the company’s stock. This implies that analysts working for these institutions have reviewed the title and appreciate it. But like everyone else, they could be wrong. When several institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes awry, several parties may compete with each other to sell stocks quickly. This risk is higher in a company without a history of growth. You can see the historical earnings and revenue of the Lenovo Group below, but keep in mind that there is always more to tell.

profit and revenue growth
SEHK: 992 Revenue and Revenue Growth October 19, 2021

The Lenovo group does not belong to hedge funds. Legend Holdings Corporation is currently the largest shareholder, with 24% of the shares outstanding. Meanwhile, the second and third largest shareholders hold 7.2% and 6.4% of the outstanding shares, respectively. In addition, CEO Yuanqing Yang owns 6.2% of the shares of the company.

We also observed that the top 6 shareholders make up more than half of the share register, with a few smaller shareholders to some extent to balance the interests of the larger ones.

While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand the expected performance of a stock. Many analysts cover the stock, so it can be interesting to see what they are forecasting as well.

Lenovo Group Insider Ownership

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management ultimately reports to the board of directors. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.

I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.

I can report that insiders own shares of Lenovo Group Limited. Insiders own HK $ 5.9 billion in shares (at current prices). It’s good to see this level of investment. You can check here if these insiders have bought recently.

General public property

With a 33% stake, the general public has some influence over Lenovo Group. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in line with other large shareholders.

Owned by a private company

It seems that private companies own 6.4% of the shares of the Lenovo group. Private companies can be related parties. Sometimes insiders have an interest in a public company through a stake in a private company, rather than in their own capacity as an individual. While it is difficult to draw general conclusions, it should be noted that this is an additional area of ​​research.

Public enterprise ownership

We can see that state-owned companies own 24% of the shares of Lenovo Group at issue. It may be a strategic interest and the two companies may have related business interests. They may have defused. This exploitation probably deserves further study.

Next steps:

I find it very interesting to see who exactly owns a company. But to really get an overview, we have to take other information into account as well. Consider, for example, the ever-present specter of investment risk. We have identified 1 warning sign with Lenovo Group, and understanding them should be part of your investment process.

If you are like me, you might want to ask yourself if this business will grow or shrink. Fortunately, you can check out this free report showing analysts’ forecasts for its future.

NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St does not have any position in the mentioned stocks.

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