Insiders are the top stockholders in Winstech Precision Holding Co., LTD. (SZSE:001319), and the recent 11% drop might have disappointed them

Key Insights

• Significant insider control over Winstech Precision Holding implies vested interests in company growth
• The top 2 shareholders own 56% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

A look at the shareholders of Winstech Precision Holding Co., LTD. (SZSE:001319) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 56% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to CN¥2.2b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Winstech Precision Holding.

View our latest analysis for Winstech Precision Holding

What Does The Institutional Ownership Tell Us About Winstech Precision Holding?

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 Winstech Precision Holding 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 Winstech Precision Holding. Looking at our data, we can see that the largest shareholder is Lu Rong Xia with 35% of shares outstanding. For context, the second largest shareholder holds about 21% of the shares outstanding, followed by an ownership of 5.0% by the third-largest shareholder. Guoqiang Yang, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 56% stake.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Winstech Precision Holding

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our most recent data indicates that insiders own the majority of Winstech Precision Holding Co., LTD.. This means they can collectively make decisions for the company. So they have a CN¥1.2b stake in this CN¥2.2b 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

With a 28% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Winstech Precision Holding. 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 11%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Winstech Precision Holding is showing 2 warning signs in our investment analysis , and 1 of those is potentially serious...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.