Yahoo Finance With 88% ownership, Big Tree Cloud Holdings Limited (NASDAQ:DSY) insiders have a lot riding on the company's future
Key Insights
Insiders appear to have a vested interest in Big Tree Cloud Holdings' growth, as seen by their sizeable ownership
88% of the company is held by a single shareholder (Wenquan Zhu)
Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
To get a sense of who is truly in control of Big Tree Cloud Holdings Limited (NASDAQ:DSY), it is important to understand the ownership structure of the business. With 88% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
So, insiders of Big Tree Cloud Holdings have a lot at stake and every decision they make on the company’s future is important to them from a financial point of view.
In the chart below, we zoom in on the different ownership groups of Big Tree Cloud Holdings.
Check out our latest analysis for Big Tree Cloud Holdings
What Does The Lack Of Institutional Ownership Tell Us About Big Tree Cloud Holdings?
Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.
There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Big Tree Cloud Holdings might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.
Big Tree Cloud Holdings is not owned by hedge funds. With a 88% stake, CEO Wenquan Zhu is the largest shareholder. 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.
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 Big Tree Cloud Holdings
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 Big Tree Cloud Holdings Limited stock. This gives them a lot of power. That means they own US$91m worth of shares in the US$103m company. That's quite meaningful. 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
The general public-- including retail investors -- own 12% stake in the company, and hence can't easily be ignored. 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. Take risks for example - Big Tree Cloud Holdings has 5 warning signs (and 3 which are a bit unpleasant) we think you should know about.
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.
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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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
