LexinFintech Holdings Ltd.'s (NASDAQ:LX) most bullish insider is CEO Wenjie Xiao, and their holdings value went up by 14% last week
Key Insights
Insiders appear to have a vested interest in LexinFintech Holdings' growth, as seen by their sizeable ownership
51% of the business is held by the top 5 shareholders
To get a sense of who is truly in control of LexinFintech Holdings Ltd. (NASDAQ:LX), it is important to understand the ownership structure of the business. With 37% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
As a result, insiders were the biggest beneficiaries of last week’s 14% gain.
Let's delve deeper into each type of owner of LexinFintech Holdings, beginning with the chart below.
Check out our latest analysis for LexinFintech Holdings
What Does The Institutional Ownership Tell Us About LexinFintech Holdings?
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.
LexinFintech Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 LexinFintech Holdings' earnings history below. Of course, the future is what really matters.
LexinFintech Holdings is not owned by hedge funds. With a 26% stake, CEO Wenjie Xiao is the largest shareholder. With 7.5% and 7.3% of the shares outstanding respectively, Fidelity International Ltd and Yi Wu are the second and third largest shareholders. Interestingly, the third-largest shareholder, Yi Wu is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.
To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.
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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of LexinFintech Holdings
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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.
It seems insiders own a significant proportion of LexinFintech Holdings Ltd.. Insiders have a US$116m stake in this US$316m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over LexinFintech Holdings. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Private Equity Ownership
With an ownership of 7.1%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
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. Case in point: We've spotted 2 warning signs for LexinFintech Holdings you should be aware of, and 1 of them is potentially serious.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.
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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.
