Is the Shareholding of Concord Medical Services Holdings Limited (NYSE: CCM) biased in favor of insiders?


A look at the shareholders of Concord Medical Services Holdings Limited (NYSE: CCM) can tell us which group is more powerful. Institutions often own shares in larger companies, and we would expect insiders to own a noticeable percentage of smaller ones. I generally like to see some degree of insider ownership, even if it’s just a little. As Nassim Nicholas Taleb said, “Don’t tell me what you think, tell me what you have in your wallet.

Concord Medical Services Holdings is not a large company by global standards. It has a market cap of $ 109 million, which means it wouldn’t get the attention of many institutional investors. Looking at our data on ownership groups (below), it appears that institutions are not really present on the share register. We can zoom in on the different ownership groups to find out more about Concord Medical Services Holdings.

Check out our latest review for Concord Medical Services Holdings

NYSE: CCM Ownership Breakdown October 20, 2021

What does the lack of institutional ownership tell us about Concord Medical Services Holdings?

We don’t tend to see institutional investors owning stocks of very risky, lightly traded, or very small companies. While we sometimes see large companies without registered institutions, this is not particularly common.

There can be various reasons why no institution owns shares in a company. Typically, smaller newly listed companies do not attract much attention from fund managers, as it would not be possible for large fund managers to forge a meaningful position in the company. On the other hand, there is always the possibility that professional investors will avoid a company because they think it is not the best place for their money. Concord Medical Services Holdings may not have the kind of past performance institutions are looking for, or perhaps they just haven’t studied the company closely.

profit and revenue growth
NYSE: CCM Profits and Revenue Growth October 20, 2021

Hedge funds don’t have a lot of shares in Concord Medical Services Holdings. Looking at our data we can see that the largest shareholder is Morgancreek Investment Holdings Limited with 40% of the shares outstanding. Meanwhile, the second and third largest shareholders hold 12% and 10% of the outstanding shares, respectively.

To make our study more interesting, we found that the top 2 shareholders have a controlling stake in the company, which means that they are powerful enough to influence the decisions of the company.

While it makes sense to study a company’s institutional ownership data, it also makes sense to study analysts’ sentiments to know which way the wind is blowing. We do not see any analyst coverage of the stock at this time, so the company is unlikely to be widely held.

Insider ownership of Concord Medical Services Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management ultimately reports to the board of directors. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.

I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders have a significant stake in Concord Medical Services Holdings Limited. Insiders own $ 14 million in shares of the $ 109 million company. This may suggest that the founders still own a lot of shares. You can click here to see if they bought or sold.

General public property

The general public has a 31% stake in Concord Medical Services Holdings. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in line with other large shareholders.

Owned by a private company

It appears that private companies own 56% of the shares of Concord Medical Services Holdings. It may be worth pursuing the question further. If related parties, such as insiders, have an interest in any of these private companies, this should be disclosed in the annual report. Private companies may also have a strategic interest in the business.

Next steps:

While it is worth considering the different groups that own a business, there are other factors that are even more important. Be aware that Concord Medical Services Holdings displays 1 warning sign in our investment analysis , you must know…

If you would rather consult with another company – one with potentially superior finances – then don’t miss this free list of interesting companies, supported by solid financial data.

NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in the mentioned stocks.

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