The big shareholder groups in Wunong Net Technology Company Limited (NASDAQ:WNW) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Warren Buffett said that he likes a business with enduring competitive advantages that is run by able and owner-oriented people. So its nice to see some insider ownership, because it may suggest that management is owner-oriented.
With a market capitalization of US$131m, Wunong Net Technology is a small cap stock, so it might not be well known by many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions are not on the share registry. We can zoom in on the different ownership groups, to learn more about Wunong Net Technology.
NasdaqCM:WNW Ownership Breakdown August 3rd 2021
What Does The Lack Of Institutional Ownership Tell Us About Wunong Net Technology?
Small companies that are not very actively traded often lack institutional investors, but its less common to see large companies without them.
There are multiple explanations for why institutions dont 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 dont own the stock because they arent convinced it will perform well. Wunong Net Technology might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.
NasdaqCM:WNW Earnings and Revenue Growth August 3rd 2021
Hedge funds dont have many shares in Wunong Net Technology. Our data shows that Union International Holdings is the largest shareholder with 20% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 17% and 9.6%, of the shares outstanding, respectively.
To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the companys decision-making.
Researching institutional ownership is a good way to gauge and filter a stocks expected performance. The same can be achieved by studying analyst sentiments. Were 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 Wunong Net Technology
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 information suggests that insiders own more than half of Wunong Net Technology Company Limited. This gives them effective control of the company. Given it has a market cap of US$131m, that means they have US$69m worth of shares. 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
The general public, with a 27% stake in the company, will not 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.
Private Company Ownership
It seems that Private Companies own 20%, of the Wunong Net Technology stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and weve spotted 1 warning sign for Wunong Net Technology you should know about.
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.
This article by Simply Wall St is general in nature. 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.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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