While institutions invested in Full Truck Alliance Co. Ltd. (NYSE:YMM) benefited from last week's 6.5% gain, individual investors stood to gain the most
If you want to know who really controls Full Truck Alliance Co. Ltd. (NYSE:YMM), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual investors with 35% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Individual investors gained the most after market cap touched US$11b last week, while institutions who own 34% also benefitted.
Let's delve deeper into each type of owner of Full Truck Alliance, beginning with the chart below.
View our latest analysis for Full Truck Alliance
What Does The Institutional Ownership Tell Us About Full Truck Alliance?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
As you can see, institutional investors have a fair amount of stake in Full Truck Alliance. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Full Truck Alliance's historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Full Truck Alliance. SoftBank Investment Advisers (UK) Limited is currently the company's largest shareholder with 20% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 10% and 4.1%, of the shares outstanding, respectively. Hui Zhang, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.
On further inspection, we found that more than half the company's shares are owned by the top 10 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Full Truck Alliance
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Our most recent data indicates that insiders own a reasonable proportion of Full Truck Alliance Co. Ltd.. It is very interesting to see that insiders have a meaningful US$1.1b stake in this US$11b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.
General Public Ownership
The general public, who are usually individual investors, hold a 35% stake in Full Truck Alliance. 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
With a stake of 20%, private equity firms could influence the Full Truck Alliance board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Full Truck Alliance , and understanding them should be part of your investment process.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.
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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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