Wuhan Lincontrol Automotive Electronics Co., Ltd.'s (SHSE:688667) most bullish insider, CEO Heping Wang must be pleased with the recent 12% gain

Key Insights

• Wuhan Lincontrol Automotive Electronics' significant insider ownership suggests inherent interests in company's expansion
• 55% of the business is held by the top 3 shareholders
• Institutions own 13% of Wuhan Lincontrol Automotive Electronics

A look at the shareholders of Wuhan Lincontrol Automotive Electronics Co., Ltd. (SHSE:688667) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 60% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥298m last week.

Let's delve deeper into each type of owner of Wuhan Lincontrol Automotive Electronics, beginning with the chart below.

View our latest analysis for Wuhan Lincontrol Automotive Electronics

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

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.

Wuhan Lincontrol Automotive Electronics already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Wuhan Lincontrol Automotive Electronics' historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Wuhan Lincontrol Automotive Electronics. The company's CEO Heping Wang is the largest shareholder with 26% of shares outstanding. In comparison, the second and third largest shareholders hold about 24% and 5.2% of the stock.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Wuhan Lincontrol Automotive Electronics

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. 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.

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.

Our information suggests that insiders own more than half of Wuhan Lincontrol Automotive Electronics Co., Ltd.. This gives them effective control of the company. Given it has a market cap of CN¥2.7b, that means they have CN¥1.6b worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 21% stake in Wuhan Lincontrol Automotive Electronics. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

We can see that Private Companies own 7.1%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Wuhan Lincontrol Automotive Electronics better, we need to consider many other factors. Take risks for example - Wuhan Lincontrol Automotive Electronics has 3 warning signs we think you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.