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Could Yuexiu Real Estate Investment Trust's (HKG:405) Investor Composition Influence The Stock Price?

Simply Wall St

The big shareholder groups in Yuexiu Real Estate Investment Trust (HKG:405) have power over the company. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.

With a market capitalization of HK$16b, Yuexiu Real Estate Investment Trust is a decent size, so it is probably on the radar of institutional investors. Taking a look at our data on the ownership groups (below), it's seems that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about 405.

View our latest analysis for Yuexiu Real Estate Investment Trust

SEHK:405 Ownership Summary, October 22nd 2019

What Does The Institutional Ownership Tell Us About Yuexiu Real Estate Investment Trust?

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

As you can see, institutional investors own 5.6% of Yuexiu Real Estate Investment Trust. This suggests some credibility amongst professional investors. But we can't rely on that fact alone, since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Yuexiu Real Estate Investment Trust, (below). Of course, keep in mind that there are other factors to consider, too.

SEHK:405 Income Statement, October 22nd 2019

Hedge funds don't have many shares in Yuexiu Real Estate Investment Trust. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Yuexiu Real Estate Investment Trust

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.

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 data suggests that insiders own under 1% of Yuexiu Real Estate Investment Trust in their own names. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own HK$12k worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public holds a 40% stake in 405. 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

Public companies currently own 54% of 405 stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.