Zhejiang Wanfeng Auto Wheel Co., Ltd.'s (SZSE:002085) last week's 8.0% decline must have disappointed individual investors who have a significant stake

Key Insights

• Zhejiang Wanfeng Auto Wheel's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 4 shareholders own 52% of the company
• Institutional ownership in Zhejiang Wanfeng Auto Wheel is 18%

If you want to know who really controls Zhejiang Wanfeng Auto Wheel Co., Ltd. (SZSE:002085), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual investors with 37% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, individual investors as a group endured the highest losses last week after market cap fell by CN¥2.3b.

Let's take a closer look to see what the different types of shareholders can tell us about Zhejiang Wanfeng Auto Wheel.

Check out our latest analysis for Zhejiang Wanfeng Auto Wheel

What Does The Institutional Ownership Tell Us About Zhejiang Wanfeng Auto Wheel?

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 Zhejiang Wanfeng Auto Wheel does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Zhejiang Wanfeng Auto Wheel's earnings history below. Of course, the future is what really matters.

Zhejiang Wanfeng Auto Wheel is not owned by hedge funds. Wanfeng Auto Holding Group Co.,Ltd is currently the company's largest shareholder with 35% of shares outstanding. For context, the second largest shareholder holds about 9.1% of the shares outstanding, followed by an ownership of 4.7% by the third-largest shareholder.

Our research also brought to light the fact that roughly 52% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. 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 Zhejiang Wanfeng Auto Wheel

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

We can report that insiders do own shares in Zhejiang Wanfeng Auto Wheel Co., Ltd.. This is a big company, so it is good to see this level of alignment. Insiders own CN¥1.4b worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 37% stake in Zhejiang Wanfeng Auto Wheel. 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

It seems that Private Companies own 35%, of the Zhejiang Wanfeng Auto Wheel stock. 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 Zhejiang Wanfeng Auto Wheel better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Zhejiang Wanfeng Auto Wheel you should be aware of, and 2 of them can't be ignored.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.