Insiders the biggest winners as Wuxi Best Precision Machinery Co., Ltd.'s (SZSE:300580) market cap rises to CN¥8.9b

Key Insights

• Significant insider control over Wuxi Best Precision Machinery implies vested interests in company growth
• The largest shareholder of the company is Yu Hua Cao with a 59% stake
• 11% of Wuxi Best Precision Machinery is held by Institutions

If you want to know who really controls Wuxi Best Precision Machinery Co., Ltd. (SZSE:300580), then you'll have to look at the makeup of its share registry. With 59% stake, individual insiders possess the maximum shares in the company. 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, insiders scored the highest last week as the company hit CN¥8.9b market cap following a 6.3% gain in the stock.

Let's delve deeper into each type of owner of Wuxi Best Precision Machinery, beginning with the chart below.

Check out our latest analysis for Wuxi Best Precision Machinery

What Does The Institutional Ownership Tell Us About Wuxi Best Precision Machinery?

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.

Wuxi Best Precision Machinery already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Wuxi Best Precision Machinery's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Wuxi Best Precision Machinery. Yu Hua Cao is currently the largest shareholder, with 59% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. For context, the second largest shareholder holds about 2.6% of the shares outstanding, followed by an ownership of 2.4% by the third-largest 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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Wuxi Best Precision Machinery

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.

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 Wuxi Best Precision Machinery Co., Ltd. stock. This gives them a lot of power. Insiders own CN¥5.3b worth of shares in the CN¥8.9b company. That's extraordinary! Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public-- including retail investors -- own 28% stake in the company, and hence can't easily be ignored. 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.

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. Take risks for example - Wuxi Best Precision Machinery has 3 warning signs we think you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.