After the recent decline, ITC Properties Group Limited (HKG:199) Senior Key Executive Kwok Keung Chan's holdings have lost 22% of their value

Key Insights

• Insiders appear to have a vested interest in ITC Properties Group's growth, as seen by their sizeable ownership
• Kwok Keung Chan owns 52% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

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Every investor in ITC Properties Group Limited (HKG:199) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 59% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 22% decline in share price, insiders suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about ITC Properties Group.

See our latest analysis for ITC Properties Group

What Does The Lack Of Institutional Ownership Tell Us About ITC Properties Group?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. ITC Properties Group's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

ITC Properties Group is not owned by hedge funds. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In ITC Properties Group's case, its Senior Key Executive, Kwok Keung Chan, is the largest shareholder, holding 52% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 10% and 4.8%, of the shares outstanding, respectively. Interestingly, the third-largest shareholder, Hon Kit Cheung is also a Chairman of the Board, again, indicating strong insider ownership amongst the company's top shareholders.

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. 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 ITC Properties Group

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems that insiders own more than half the ITC Properties Group Limited stock. This gives them a lot of power. So they have a HK$659m stake in this HK$1.1b 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 31% stake in ITC Properties Group. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

It seems that Private Companies own 10%, of the ITC Properties Group stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand ITC Properties Group better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for ITC Properties Group you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.