After the recent decline, Lee & Man Paper Manufacturing Limited (HKG:2314) Top Key Executive Man Chun Lee's holdings have lost 7.9% of their value

Key Insights

• Significant insider control over Lee & Man Paper Manufacturing implies vested interests in company growth
• The top 2 shareholders own 62% of the company
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

If you want to know who really controls Lee & Man Paper Manufacturing Limited (HKG:2314), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 73% 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).

And last week, insiders endured the biggest losses as the stock fell by 7.9%.

Let's delve deeper into each type of owner of Lee & Man Paper Manufacturing, beginning with the chart below.

View our latest analysis for Lee & Man Paper Manufacturing

What Does The Institutional Ownership Tell Us About Lee & Man Paper Manufacturing?

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.

Since institutions own only a small portion of Lee & Man Paper Manufacturing, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. So if the company itself can improve over time, we may well see more institutional buyers in the future. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Hedge funds don't have many shares in Lee & Man Paper Manufacturing. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Lee & Man Paper Manufacturing's case, its Top Key Executive, Man Chun Lee, is the largest shareholder, holding 32% of shares outstanding. In comparison, the second and third largest shareholders hold about 30% and 11% of the stock. Interestingly, the second-largest shareholder, Man Bun Lee is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

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 62% 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Lee & Man Paper Manufacturing

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 Lee & Man Paper Manufacturing Limited stock. This gives them a lot of power. That means insiders have a very meaningful HK$9.2b stake in this HK$13b business. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 23% stake in Lee & Man Paper Manufacturing. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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. For example, we've discovered 2 warning signs for Lee & Man Paper Manufacturing (1 is a bit unpleasant!) that you should be aware of before investing here.

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.

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.