Ningbo TIP Rubber Technology Co.,Ltd's (SHSE:605255) most bullish insider, CEO Jianyi You must be pleased with the recent 15% gain

Key Insights

• Significant insider control over Ningbo TIP Rubber TechnologyLtd implies vested interests in company growth
• 65% of the company is held by a single shareholder (Jianyi You)
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

To get a sense of who is truly in control of Ningbo TIP Rubber Technology Co.,Ltd (SHSE:605255), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 65% ownership. 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 CN¥2.3b market cap following a 15% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Ningbo TIP Rubber TechnologyLtd.

Check out our latest analysis for Ningbo TIP Rubber TechnologyLtd

What Does The Institutional Ownership Tell Us About Ningbo TIP Rubber TechnologyLtd?

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.

Less than 5% of Ningbo TIP Rubber TechnologyLtd 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. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. 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.

Hedge funds don't have many shares in Ningbo TIP Rubber TechnologyLtd. With a 65% stake, CEO Jianyi You is the largest shareholder. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. For context, the second largest shareholder holds about 6.4% of the shares outstanding, followed by an ownership of 3.4% 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 Ningbo TIP Rubber TechnologyLtd

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. 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.

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 Ningbo TIP Rubber Technology Co.,Ltd stock. This gives them a lot of power. Given it has a market cap of CN¥2.3b, that means they have CN¥1.5b worth of shares. 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 21% stake in Ningbo TIP Rubber TechnologyLtd. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 9.8%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Ningbo TIP Rubber TechnologyLtd better, we need to consider many other factors. Be aware that Ningbo TIP Rubber TechnologyLtd is showing 3 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...

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.

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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.