Every investor in Lee and Man Paper Manufacturing Limited (HKG: 2314) should know about the most powerful shareholder groups. Institutions often own shares in more established companies, while it is not uncommon to see insiders owning a good number of smaller companies. Warren Buffett said he enjoys “a business with sustainable competitive advantages that is led by skilled, owner-oriented people.” So it’s nice to see some insider ownership as it can suggest that the management is owner-driven.
Lee and Man Paper Manufacturing is a pretty big company. It has a market capitalization of HK $ 27 billion. Normally, institutions own a significant share of a company of this size. Looking at our data on ownership groups (below), it appears that institutions own shares in the company. Let’s take a closer look at what different types of shareholders can tell us about Lee and Man Paper Manufacturing.
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What does institutional ownership tell us about the Lee and Man papermaking?
Many institutions measure their performance against an index that approximates the local market. Thus, they generally pay more attention to companies that are included in the major indices.
We can see that Lee and Man Paper Manufacturing has institutional investors; and they own a large portion of the company’s shares. This may indicate that the company has a certain degree of credibility in the investment community. However, it is better not to rely on the so-called validation that accompanies institutional investors. They too are sometimes wrong. If several institutions change their mind about a stock at the same time, you could see the stock price drop quickly. So it’s worth checking out the earnings history of Lee and Man Paper Manufacturing below. Of course, the future is what really matters.
Hedge funds don’t have a lot of stocks in Lee and Man Paper Manufacturing. From our data, we infer that the largest shareholder is Man Chun Lee (who also holds the title of Top Key Executive) with 31% of the shares outstanding. This is generally considered a good sign when insiders own a significant number of company shares, and in this case, we are happy to see a company insider playing the role of a key stakeholder. With 31% and 9.5% of shares outstanding, respectively, Man Bun Lee and Wan Lee are the second and third largest shareholders. Interestingly, the second largest shareholder, Man Bun Lee, is also Chairman and CEO, again indicating strong insider ownership among the major shareholders of the company.
A more detailed study of the register of shareholders showed us that 2 of the main shareholders hold a considerable share of the ownership of the company, through their 63% stake.
While it makes sense to study a company’s institutional ownership data, it also makes sense to study analysts’ sentiments to know which way the wind is blowing. Many analysts cover the stock, so it can be interesting to see what they are forecasting as well.
Insider property of Lee and Man Paper Manufacturing
The definition of business insiders can be subjective and vary from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management ultimately reports to the board of directors. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.
Insider ownership is positive when it indicates that executives think like the real owners of the company. However, strong insider ownership can also confer immense power on a small group within the company. This can be negative in some circumstances.
It appears that insiders own more than half of the shares of Lee and Man Paper Manufacturing Limited. It gives them a lot of power. Insiders own HK $ 19 billion of shares in the HK $ 27 billion company. It’s extraordinary ! Most would say this is a positive, showing strong alignment with shareholders. You can click here to see if they have sold their stake.
General public property
With 19% ownership, the general public has some influence over Lee and Man Paper Manufacturing. While this property size may not be enough to influence a policy decision in their favor, they can still have a collective impact on company policies.
I find it very interesting to see who exactly owns a company. But to really understand better, we have to take other information into account as well. Consider risks, for example. Every business has them, and we’ve spotted 2 warning signs for Lee and Man Paper Manufacturing you should know.
If you are like me, you might want to ask yourself if this business will grow or shrink. Fortunately, you can check out this free report showing analysts’ forecasts for its future.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
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