The recent 30% gain must have brightened CEO Dinggui Yan's week, Jiayin Group Inc.'s (NASDAQ:JFIN) most bullish insider
Key Insights
Jiayin Group's significant insider ownership suggests inherent interests in company's expansion
Dinggui Yan owns 51% of the company
Past performance of a company along with ownership data serve to give a strong idea about prospects for a business
To get a sense of who is truly in control of Jiayin Group Inc. (NASDAQ:JFIN), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 65% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
As a result, insiders scored the highest last week as the company hit US$362m market cap following a 30% gain in the stock.
Let's delve deeper into each type of owner of Jiayin Group, beginning with the chart below.
View our latest analysis for Jiayin Group
What Does The Lack Of Institutional Ownership Tell Us About Jiayin Group?
We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.
There are multiple explanations for why institutions don't 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 don't own the stock because they aren't convinced it will perform well. Jiayin Group's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.
Hedge funds don't have many shares in Jiayin Group. Looking at our data, we can see that the largest shareholder is the CEO Dinggui Yan with 51% of shares outstanding. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. In comparison, the second and third largest shareholders hold about 11% and 1.5% of the stock. Interestingly, the third-largest shareholder, Yifang Xu is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.
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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of Jiayin Group
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 that insiders own more than half the Jiayin Group Inc. stock. This gives them a lot of power. Given it has a market cap of US$362m, that means they have US$234m worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.
General Public Ownership
With a 35% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Jiayin Group. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Jiayin Group better, we need to consider many other factors. For instance, we've identified 1 warning sign for Jiayin Group that you should be aware of.
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.
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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.
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