Key Insights

• Fitell's significant insider ownership suggests inherent interests in company's expansion
• The largest shareholder of the company is Jieting Zhao with a 58% stake
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Fitell Corporation (NASDAQ:FTEL), then you'll have to look at the makeup of its share registry. With 58% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit US$104m market cap following a 73% gain in the stock.

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

What Does The Lack Of Institutional Ownership Tell Us About Fitell?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. Alternatively, there might be something about the company that has kept institutional investors away. Fitell's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Fitell is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Jieting Zhao with 58% of shares outstanding. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 0.1% of the shares outstanding, followed by an ownership of 0.05% by the third-largest shareholder.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Fitell

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

Our most recent data indicates that insiders own the majority of Fitell Corporation. This means they can collectively make decisions for the company. That means they own US$60m worth of shares in the US$104m company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 42% stake in Fitell. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 3 warning signs for Fitell (2 are a bit concerning!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.