With 58% ownership, Focus Universal Inc. (NASDAQ:FCUV) insiders have a lot at stake
Key Insights
Focus Universal's significant insider ownership suggests inherent interests in company's expansion
A total of 3 investors have a majority stake in the company with 51% ownership
Past performance of a company along with ownership data serve to give a strong idea about prospects for a business
A look at the shareholders of Focus Universal Inc. (NASDAQ:FCUV) can tell us which group is most powerful. The group holding the most number of shares in the company, around 58% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.
Let's delve deeper into each type of owner of Focus Universal, beginning with the chart below.
Check out our latest analysis for Focus Universal
What Does The Institutional Ownership Tell Us About Focus Universal?
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 Focus Universal. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Focus Universal's earnings history below. Of course, the future is what really matters.
Focus Universal is not owned by hedge funds. With a 33% stake, CEO Desheng Wang is the largest shareholder. The second and third largest shareholders are Lingjie Gu and Shihai Lee, with an equal amount of shares to their name at 8.6%. Interestingly, the third-largest shareholder, Shihai Lee is also a Chairman of the Board, again, indicating strong insider ownership amongst the company's top shareholders.
To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Focus Universal
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our information suggests that insiders own more than half of Focus Universal Inc.. This gives them effective control of the company. That means they own US$69m worth of shares in the US$119m company. That's quite meaningful. 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-- including retail investors -- own 36% 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 Focus Universal better, we need to consider many other factors. Take risks for example - Focus Universal has 4 warning signs (and 3 which don't sit too well with us) we think you should know about.
If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.
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.
