key insights
To understand who actually controls New Oriental Education & Technology Group Inc. (NYSE:EDU), it's important to understand the business' ownership structure. The group that owns the most shares in the company (about 70% to be exact) is institutional investors. In other words, the group will receive the maximum benefit (or maximum loss) from its investment in the company.
Because institutional investors have access to large amounts of capital, their market trends tend to be closely monitored by retail and retail investors. Therefore, having significant institutional investors invested in a company is often considered a desirable characteristic.
Let's take a closer look to see what the different types of shareholders can tell us about New Oriental Education & Technology Group.
Check out our latest analysis for New Oriental Education & Technology Group.
What does institutional ownership tell us about New Oriental Education & Technology Group?
Many institutions measure performance based on indicators that approximate local markets. 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 New Oriental Education & Technology Group. This may indicate that the company has some credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They also sometimes make mistakes. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. If such a trade goes wrong, multiple parties may compete to sell stock quickly. This risk is higher for companies without a history of growth. You can see New Oriental Education & Technology Group's historic earnings and revenue below, but keep in mind there's always more to the story.
Investors should note that institutional investors actually own more than half the company, so they can collectively wield significant power. Hedge funds don't have many shares in New Oriental Education and Technology Group. From our data, we estimate that the largest shareholder is Minhong Yu (also holds the title Top Key Executive) with his 12% ownership of the outstanding shares. It is usually considered a good sign when insiders own a significant number of shares in a company, but in this case we see company insiders playing the role of key stakeholders. I'm glad. By comparison, the second and third largest shareholders hold about 9.5% of the stock and his own 7.3%.
On further inspection, we found that the top 11 companies collectively own 50% of the company, suggesting that no single shareholder has significant control over the company.
While researching 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. . Quite a few analysts cover this stock, so you can find out its expected growth quite easily.
Insider ownership in New Oriental Education & Technology Group
The definition of an insider may vary slightly from country to country, but members of the board of directors are always considered. A company's management runs the business, but the CEO answers to the board, even if he or she is a member of the board.
Most consider insider ownership a positive, because it can indicate the board is well aligned with other shareholders. However, in some cases, too much power may be concentrated within this group.
Our information suggests that insiders own a significant amount of New Oriental Education & Technology Group Inc. stock. Insiders own US$1.7b worth of shares in the US$14b company. That means a lot. It's good to see this level of investment. Here you can see if insiders have been buying recently.
Open to the public
The general public, including retail investors, owns 17% of the company, so they can't be easily ignored. While this group doesn't necessarily call the shots, it can certainly have a big influence on how the company is run.
Next steps:
It's always worth thinking about the different groups who own shares in a company. However, to understand New Oriented Education & Technology Group better, you need to consider many other factors.
Many people find it convenient This is to find out more about how a company has performed in the past.You can access this Detailed graph Analysis of past earnings, revenue, and cash flow.
But in the end it's the futureIt, not the past, determines how well the owner of this business will do. So we might consider this free report showing whether analysts are predicting a bright future.
Note: The numbers in this article are calculated using data from the previous 12 months and refer to the 12-month period ending on the last day of the month in which the financial statements are dated. This may not match the full year annual report figures.
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This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
