Wuhan Lincontrol Automotive Electronics Co., Ltd.'s (SHSE:688667) largest shareholder, CEO Heping Wang sees holdings value fall by 13% following recent drop

Key Insights

• Wuhan Lincontrol Automotive Electronics' significant insider ownership suggests inherent interests in company's expansion
• A total of 3 investors have a majority stake in the company with 55% ownership
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

If you want to know who really controls Wuhan Lincontrol Automotive Electronics Co., Ltd. (SHSE:688667), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 57% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, insiders endured the biggest losses as the stock fell by 13%.

In the chart below, we zoom in on the different ownership groups of Wuhan Lincontrol Automotive Electronics.

See our latest analysis for Wuhan Lincontrol Automotive Electronics

What Does The Institutional Ownership Tell Us About Wuhan Lincontrol Automotive Electronics?

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.

We can see that Wuhan Lincontrol Automotive Electronics does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Wuhan Lincontrol Automotive Electronics, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Wuhan Lincontrol Automotive Electronics. Looking at our data, we can see that the largest shareholder is the CEO Heping Wang with 26% of shares outstanding. For context, the second largest shareholder holds about 24% of the shares outstanding, followed by an ownership of 5.2% by the third-largest shareholder.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 55% stake.

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

Insider Ownership Of Wuhan Lincontrol Automotive Electronics

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.

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.

It seems that insiders own more than half the Wuhan Lincontrol Automotive Electronics Co., Ltd. stock. This gives them a lot of power. That means they own CN¥1.1b worth of shares in the CN¥1.9b 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-- including retail investors -- own 29% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 6.5%, of the Wuhan Lincontrol Automotive Electronics stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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 instance, we've identified 4 warning signs for Wuhan Lincontrol Automotive Electronics (1 makes us a bit uncomfortable) that you should be aware of.

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.