Yahoo Finance With 53% ownership, X Financial (NYSE:XYF) insiders have a lot at stake
Key Insights
Insiders appear to have a vested interest in X Financial's growth, as seen by their sizeable ownership
The top 3 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
Every investor in X Financial (NYSE:XYF) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 53% 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).
So, insiders of X Financial 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.
Let's delve deeper into each type of owner of X Financial, beginning with the chart below.
View our latest analysis for X Financial
What Does The Institutional Ownership Tell Us About X Financial?
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.
Institutions have a very small stake in X Financial. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. 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.
X Financial is not owned by hedge funds. The company's CEO Yue Tang is the largest shareholder with 37% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 9.4% and 6.9%, of the shares outstanding, respectively.
A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 53% stake.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of X Financial
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
It seems that insiders own more than half the X Financial stock. This gives them a lot of power. So they have a US$100m stake in this US$187m business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 45% stake in X Financial. 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.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand X Financial better, we need to consider many other factors. Take risks for example - X Financial has 1 warning sign we think you should be aware of.
If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.
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.
