The large shareholder groups of Viomi Technology Co., Ltd. (NASDAQ: VIOT) have power over the company. Generally speaking, as a business grows, institutions increase their participation. Conversely, insiders often decrease their ownership over time. Warren Buffett said he enjoys “a business with sustainable competitive advantages, led by skilled people and owner-centered.” So it’s nice to see some insider ownership as it may suggest that the management is owner-driven.
Viomi Technology is a small company with a market cap of US $ 324 million, so it may still go under the radar of many institutional investors. Our analysis of company ownership, below, shows that institutional investors bought the company. Let’s take a closer look at what different types of shareholders can tell us about Viomi Technology.
Breakdown of the NasdaqGS property: VIOT October 26, 2021
What does institutional ownership tell us about Viomi technology?
Many institutions measure their performance against an index that approximates the local market. Thus, they generally pay more attention to companies that are included in the major indices.
Viomi Technology already has institutions on the share register. Indeed, they hold a respectable stake in the company. This may indicate that the company has a certain degree of credibility in the investment community. However, it’s best to beware of relying on the so-called validation that comes with institutional investors. They too are sometimes wrong. It is not uncommon to see a sharp drop in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking out Viomi Technology’s past revenue trajectory (below). Of course, keep in mind that there are other factors to consider as well.
NasdaqGS: VIOT Profits and Revenue Growth October 26, 2021
Viomi Technology is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is CEO Xiaoping Chen with 35% of the shares outstanding. With 17% and 16% of shares outstanding, respectively, Xiaomi Corporation and Shunwei, Inc. are the second and third largest shareholders.
After digging a little deeper, we found that the top 2 shareholders collectively control over half of the company’s stock, implying that they have considerable power to influence company decisions.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand the expected performance of a stock. There are a lot of analysts covering the stock, so you can look at expected growth quite easily.
Insider ownership of Viomi technology
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company reports to the board of directors and the board must represent the interests of the shareholders. Notably, sometimes senior executives themselves sit on the board of directors.
Insider ownership is positive when it indicates that executives think like the real owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
Our information suggests that insiders have a significant stake in Viomi Technology Co., Ltd. Insiders have a US $ 115 million stake in the US $ 324 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, with a 21% stake in the company, will not be easily ignored. 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.
Private equity firms hold a 16% stake in Viomi Technology. This suggests that they can influence key policy decisions. Some might like this, as sometimes private capital is activists holding management accountable. But other times, the private equity sells, after you take the company public.
Owned by a private company
Our data indicates that private companies own 5.3% of the company’s shares. 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.
Public enterprise ownership
State-owned companies currently own 17% of the shares of Viomi Technology. It may be a strategic interest and the two companies may have related business interests. They may have defused. This exploitation probably deserves further study.
While it is worth considering the different groups that own a business, there are other factors that are even more important. Concrete example: we have spotted 1 warning sign for Viomi technology you must be aware.
But finally it’s the future, not the past, which will determine the success of the owners of this business. Therefore, we believe it is advisable to take a look at this free report showing whether analysts are predicting a better future.
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 day 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 documents. Simply Wall St has no position in the mentioned stocks.
Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.