Wuxi Best Precision Machinery Co., Ltd. (SZSE:300580) adds CN¥1.2b in market cap and insiders have a 59% stake in that gain

Key Insights

• Insiders appear to have a vested interest in Wuxi Best Precision Machinery's growth, as seen by their sizeable ownership
• Yu Hua Cao owns 59% of the company
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

Every investor in Wuxi Best Precision Machinery Co., Ltd. (SZSE:300580) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 59% to be precise, is individual insiders. 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 were the biggest beneficiaries of last week’s 9.4% gain.

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?

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.

As you can see, institutional investors have a fair amount of stake in Wuxi Best Precision Machinery. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Wuxi Best Precision Machinery, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Wuxi Best Precision Machinery. Yu Hua Cao is currently the company's largest shareholder with 59% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. For context, the second largest shareholder holds about 1.4% of the shares outstanding, followed by an ownership of 1.3% by the third-largest shareholder.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

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. 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.

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.

It seems that insiders own more than half the Wuxi Best Precision Machinery Co., Ltd. stock. This gives them a lot of power. That means insiders have a very meaningful CN¥8.4b stake in this CN¥14b business. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

With a 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Wuxi Best Precision Machinery. 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. To that end, you should be aware of the 1 warning sign we've spotted with Wuxi Best Precision Machinery .

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.