The recent 6.2% gain must have brightened CEO Matao Cao's week, Zhejiang Taotao Vehicles Co., Ltd.'s (SZSE:301345) most bullish insider

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
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

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. With 69% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit CN¥6.7b market cap following a 6.2% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about Zhejiang Taotao Vehicles.

View our latest analysis for Zhejiang Taotao Vehicles

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

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.

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

Zhejiang Taotao Vehicles is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Matao Cao with 69% of shares outstanding. With such a huge stake, we infer that they have significant control of the future of the company. It's usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider with such skin in the game. In comparison, the second and third largest shareholders hold about 3.5% and 1.6% of the stock.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Zhejiang Taotao Vehicles

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

Our information suggests that insiders own more than half of Zhejiang Taotao Vehicles Co., Ltd.. This gives them effective control of the company. Given it has a market cap of CN¥6.7b, that means they have CN¥4.7b worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 15% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 4.2%, of the Zhejiang Taotao Vehicles stock. 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 is concerning...

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.