Do Insiders Own Shares In China Recycling Energy Corporation (NASDAQ:CREG)?

A look at the shareholders of China Recycling Energy Corporation (NASDAQ:CREG) can tell us which group is most powerful. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Warren Buffett said that he likes 'a business with enduring competitive advantages that is run by able and owner-oriented people'. So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

With a market capitalization of US$7.1m, China Recycling Energy is a small cap stock, so it might not be well known by many institutional investors. Taking a look at our data on the ownership groups (below), it's seems that institutions are noticeable on the share registry. Let's delve deeper into each type of owner, to discover more about China Recycling Energy.

View our latest analysis for China Recycling Energy

What Does The Institutional Ownership Tell Us About China Recycling Energy?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors own 6.7% of China Recycling Energy. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 China Recycling Energy, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in China Recycling Energy. The company's CEO Guohua Ku is the largest shareholder with 15% of shares outstanding. Next, we have Jinghe Dong and Anson Group as the second and third largest shareholders, holding 9.0% and 3.7%, of the shares outstanding, respectively.

On studying our ownership data, we found that 12 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of China Recycling Energy

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.

Our information suggests that insiders maintain a significant holding in China Recycling Energy Corporation. Insiders own US$1.7m worth of shares in the US$7.1m 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 -- mostly retail investors -- own 69% of China Recycling Energy. This size of ownership gives retail investors 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 China Recycling Energy better, we need to consider many other factors. Case in point: We've spotted 6 warning signs for China Recycling Energy you should be aware of, and 3 of them are a bit unpleasant.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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