Recent 12% pullback would hurt TianJin JinRong TianYu Precision Machinery Inc. (SZSE:300988) insiders

Key Insights

• Insiders appear to have a vested interest in TianJin JinRong TianYu Precision Machinery's growth, as seen by their sizeable ownership
• A total of 3 investors have a majority stake in the company with 51% ownership
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

If you want to know who really controls TianJin JinRong TianYu Precision Machinery Inc. (SZSE:300988), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 61% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 12% decline in share price, insiders suffered the most losses.

Let's delve deeper into each type of owner of TianJin JinRong TianYu Precision Machinery, beginning with the chart below.

See our latest analysis for TianJin JinRong TianYu Precision Machinery

What Does The Institutional Ownership Tell Us About TianJin JinRong TianYu 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.

TianJin JinRong TianYu Precision Machinery already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 TianJin JinRong TianYu Precision Machinery, (below). Of course, keep in mind that there are other factors to consider, too.

TianJin JinRong TianYu Precision Machinery is not owned by hedge funds. Our data shows that Xuewei Yan is the largest shareholder with 25% of shares outstanding. With 21% and 4.5% of the shares outstanding respectively, Xingwen Sun and Zhi Yun are the second and third largest shareholders. Zhi Yun, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Furthermore, CEO Hong Zhao is the owner of 3.2% of the company's shares.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of TianJin JinRong TianYu 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.

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.

It seems that insiders own more than half the TianJin JinRong TianYu Precision Machinery Inc. stock. This gives them a lot of power. So they have a CN¥1.3b stake in this CN¥2.2b business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 34% stake in TianJin JinRong TianYu Precision Machinery. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand TianJin JinRong TianYu Precision Machinery better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with TianJin JinRong TianYu Precision Machinery (at least 2 which make us uncomfortable) , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.