Key Insights

• The considerable ownership by retail investors in HF Foods Group indicates that they collectively have a greater say in management and business strategy
• 43% of the business is held by the top 25 shareholders
• 26% of HF Foods Group is held by insiders

To get a sense of who is truly in control of HF Foods Group Inc. (NASDAQ:HFFG), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 56% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And individual insiders on the other hand have a 26% ownership in the company. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.

Let's delve deeper into each type of owner of HF Foods Group, beginning with the chart below.

View our latest analysis for HF Foods Group

What Does The Institutional Ownership Tell Us About HF Foods Group?

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.

We can see that HF Foods Group does have institutional investors; and they hold a good portion of the company's stock. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of HF Foods Group, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in HF Foods Group. Looking at our data, we can see that the largest shareholder is Raymond Ni with 11% of shares outstanding. With 6.7% and 6.6% of the shares outstanding respectively, Zhou Ni and Xiao Mou Zhang are the second and third largest shareholders. Xiao Mou Zhang, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of HF Foods Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 insiders own a significant proportion of HF Foods Group Inc.. Insiders own US$36m worth of shares in the US$140m company. 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

The general public, who are usually individual investors, hold a substantial 56% stake in HF Foods Group, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand HF Foods Group better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for HF Foods Group 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.