Insiders were the biggest winners as Xiangyang Changyuandonggu Industry Co., Ltd.'s (SHSE:603950) market cap grew by CN¥486m last week

Key Insights

• Significant insider control over Xiangyang Changyuandonggu Industry implies vested interests in company growth
• The largest shareholder of the company is Zuoyuan Li with a 52% stake
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Xiangyang Changyuandonggu Industry Co., Ltd. (SHSE:603950) should be aware of the most powerful shareholder groups. With 64% 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.

Clearly, insiders benefitted the most after the company's market cap rose by CN¥486m last week.

In the chart below, we zoom in on the different ownership groups of Xiangyang Changyuandonggu Industry.

View our latest analysis for Xiangyang Changyuandonggu Industry

What Does The Institutional Ownership Tell Us About Xiangyang Changyuandonggu Industry?

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.

Less than 5% of Xiangyang Changyuandonggu Industry is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Xiangyang Changyuandonggu Industry. The company's largest shareholder is Zuoyuan Li, with ownership of 52%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. The second and third largest shareholders are Xianfeng Li and Congrong Li, with an equal amount of shares to their name at 5.6%. Congrong Li, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

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. 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 Xiangyang Changyuandonggu Industry

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems that insiders own more than half the Xiangyang Changyuandonggu Industry Co., Ltd. stock. This gives them a lot of power. So they have a CN¥3.0b stake in this CN¥4.7b business. 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 34% stake in Xiangyang Changyuandonggu Industry. 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 Xiangyang Changyuandonggu Industry better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Xiangyang Changyuandonggu Industry (at least 1 which makes us a bit uncomfortable) , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.