Yahoo Finance Owning 48% in LexinFintech Holdings Ltd. (NASDAQ:LX) means that insiders are heavily invested in the company's future
Key Insights
Insiders appear to have a vested interest in LexinFintech Holdings' growth, as seen by their sizeable ownership
A total of 4 investors have a majority stake in the company with 55% ownership
If you want to know who really controls LexinFintech Holdings Ltd. (NASDAQ:LX), 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 48% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
So, insiders of LexinFintech Holdings have a lot at stake and every decision they make on the company’s future is important to them from a financial point of view.
Let's delve deeper into each type of owner of LexinFintech Holdings, beginning with the chart below.
View our latest analysis for LexinFintech Holdings
What Does The Institutional Ownership Tell Us About LexinFintech Holdings?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
As you can see, institutional investors have a fair amount of stake in LexinFintech Holdings. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 LexinFintech Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.
LexinFintech Holdings is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Wenjie Xiao with 24% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 16% and 7.5%, of the shares outstanding, respectively.
Our research also brought to light the fact that roughly 55% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.
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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of LexinFintech 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.
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 LexinFintech Holdings Ltd.. It has a market capitalization of just US$273m, and insiders have US$130m 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
The general public-- including retail investors -- own 30% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand LexinFintech Holdings better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with LexinFintech Holdings .
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
