Sunlands Technology Group's (NYSE:STG): Top Key Executive Peng Ou is the most bullish insider, and their stock value gained 35% last week
Key Insights
Insiders appear to have a vested interest in Sunlands Technology Group's growth, as seen by their sizeable ownership
The top 2 shareholders own 53% of the company
Using data from company's past performance alongside ownership research, one can better assess the future performance of a company
A look at the shareholders of Sunlands Technology Group (NYSE:STG) can tell us which group is most powerful. The group holding the most number of shares in the company, around 52% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
As a result, insiders were the biggest beneficiaries of last week’s 35% gain.
In the chart below, we zoom in on the different ownership groups of Sunlands Technology Group.
View our latest analysis for Sunlands Technology Group
What Does The Institutional Ownership Tell Us About Sunlands Technology Group?
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.
We can see that Sunlands Technology Group does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Sunlands Technology Group, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don't have many shares in Sunlands Technology Group. Our data suggests that Peng Ou, who is also the company's Top Key Executive, holds the most number of shares at 41%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. In comparison, the second and third largest shareholders hold about 12% and 8.1% of the stock. Furthermore, CEO Tongbo Liu is the owner of 7.4% of the company's shares.
A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 53% stake.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Sunlands Technology 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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
It seems that insiders own more than half the Sunlands Technology Group stock. This gives them a lot of power. So they have a US$53m stake in this US$102m business. 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
With a 22% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sunlands Technology Group. 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
Private equity firms hold a 12% stake in Sunlands Technology Group. This suggests they can be influential in key policy decisions. 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.
Public Company Ownership
It appears to us that public companies own 8.1% of Sunlands Technology Group. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 4 warning signs for Sunlands Technology Group (2 make us uncomfortable!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
