Jiangsu Olive Sensors High-Tech Co., Ltd.'s (SZSE:300507) market cap dropped CN¥422m last week; Retail investors bore the brunt

Key Insights

• The considerable ownership by retail investors in Jiangsu Olive Sensors High-Tech indicates that they collectively have a greater say in management and business strategy
• 44% of the business is held by the top 23 shareholders
• 43% of Jiangsu Olive Sensors High-Tech is held by insiders

If you want to know who really controls Jiangsu Olive Sensors High-Tech Co., Ltd. (SZSE:300507), then you'll have to look at the makeup of its share registry. We can see that retail investors own the lion's share in the company with 56% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders who own 43% came under pressure after market cap dropped to CN¥5.6b last week,retail investors took the most losses.

In the chart below, we zoom in on the different ownership groups of Jiangsu Olive Sensors High-Tech.

Check out our latest analysis for Jiangsu Olive Sensors High-Tech

What Does The Lack Of Institutional Ownership Tell Us About Jiangsu Olive Sensors High-Tech?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Jiangsu Olive Sensors High-Tech's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Hedge funds don't have many shares in Jiangsu Olive Sensors High-Tech. Hongqing Li is currently the company's largest shareholder with 37% of shares outstanding. For context, the second largest shareholder holds about 3.5% of the shares outstanding, followed by an ownership of 1.1% by the third-largest shareholder. Fei Teng, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

Our studies suggest that the top 23 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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 Jiangsu Olive Sensors High-Tech

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.

Our information suggests that insiders maintain a significant holding in Jiangsu Olive Sensors High-Tech Co., Ltd.. Insiders own CN¥2.4b worth of shares in the CN¥5.6b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public -- including retail investors -- own 56% of Jiangsu Olive Sensors High-Tech. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Jiangsu Olive Sensors High-Tech better, we need to consider many other factors. For instance, we've identified 2 warning signs for Jiangsu Olive Sensors High-Tech 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.