Key Insights

• Noah Holdings' significant insider ownership suggests inherent interests in company's expansion
• The top 5 shareholders own 53% of the company
• Institutions own 30% of Noah Holdings

If you want to know who really controls Noah Holdings Limited (NYSE:NOAH), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 43% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

So it follows, every decision made by insiders of Noah Holdings regarding the company's future would be crucial to them.

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

Check out our latest analysis for Noah Holdings

What Does The Institutional Ownership Tell Us About Noah Holdings?

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 Noah Holdings. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Noah Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.

Our data indicates that hedge funds own 10% of Noah Holdings. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Noah Holdings' case, its Top Key Executive, Jingbo Wang, is the largest shareholder, holding 21% of shares outstanding. In comparison, the second and third largest shareholders hold about 10% and 10% of the stock. Interestingly, the second-largest shareholder, Zhe Yin is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Noah Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 insiders own a significant proportion of Noah Holdings Limited. It has a market capitalization of just US$762m, and insiders have US$325m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 17% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Noah Holdings. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Noah Holdings you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.