Matao Cao Zhejiang Taotao Vehicles Co., Ltd.'s (SZSE:301345) CEO is the most bullish insider, and their stock value gained 9.1%last week

Key Insights

• Zhejiang Taotao Vehicles' significant insider ownership suggests inherent interests in company's expansion
• The largest shareholder of the company is Matao Cao with a 69% stake
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

To get a sense of who is truly in control of Zhejiang Taotao Vehicles Co., Ltd. (SZSE:301345), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 69% 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).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥621m last week.

In the chart below, we zoom in on the different ownership groups of Zhejiang Taotao Vehicles.

Check out our latest analysis for Zhejiang Taotao Vehicles

What Does The Institutional Ownership Tell Us About Zhejiang Taotao Vehicles?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Zhejiang Taotao Vehicles does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Taotao Vehicles' earnings history below. Of course, the future is what really matters.

Zhejiang Taotao Vehicles is not owned by hedge funds. With a 69% stake, CEO Matao Cao is the largest shareholder. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. With 3.5% and 1.6% of the shares outstanding respectively, Jinyun Zhongjiu Investment Partnership Enterprise (Limited Partnership) and Zhejiang Taotao Vehicles Co., Ltd., ESOP are the second and third largest shareholders.

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 Zhejiang Taotao Vehicles

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.

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.

Our information suggests that insiders own more than half of Zhejiang Taotao Vehicles Co., Ltd.. This gives them effective control of the company. Insiders own CN¥5.2b worth of shares in the CN¥7.4b 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, who are usually individual investors, hold a 17% stake in Zhejiang Taotao Vehicles. 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

Our data indicates that Private Companies hold 4.2%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Zhejiang Taotao Vehicles better, we need to consider many other factors. Be aware that Zhejiang Taotao Vehicles is showing 2 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...

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.