Private companies invested in Inner Mongolia North Hauler Joint Stock Co., Ltd. (SHSE:600262) copped the brunt of last week's CN¥332m market cap decline

Key Insights

• Significant control over Inner Mongolia North Hauler by private companies implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 3 shareholders
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Inner Mongolia North Hauler Joint Stock Co., Ltd. (SHSE:600262), then you'll have to look at the makeup of its share registry. We can see that private companies own the lion's share in the company with 48% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, private companies as a group endured the highest losses last week after market cap fell by CN¥332m.

Let's take a closer look to see what the different types of shareholders can tell us about Inner Mongolia North Hauler.

See our latest analysis for Inner Mongolia North Hauler

What Does The Institutional Ownership Tell Us About Inner Mongolia North Hauler?

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 Inner Mongolia North Hauler does have institutional investors; and they hold a good portion of the company's stock. 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 Inner Mongolia North Hauler, (below). Of course, keep in mind that there are other factors to consider, too.

Inner Mongolia North Hauler is not owned by hedge funds. China North Industries Group Corporation Limited is currently the company's largest shareholder with 27% of shares outstanding. China National Military Commission (Xiamen) Equity Investment Fund Partnership (Limited Partnership) is the second largest shareholder owning 20% of common stock, and North Industries Group Investment Management Company LTD. holds about 3.0% of the company stock.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 51% stake.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Inner Mongolia North Hauler

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.

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.

Our data suggests that insiders own under 1% of Inner Mongolia North Hauler Joint Stock Co., Ltd. in their own names. However, it's possible that insiders might have an indirect interest through a more complex structure. It seems the board members have no more than CN¥22m worth of shares in the CN¥2.8b company. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

The general public, who are usually individual investors, hold a 46% stake in Inner Mongolia North Hauler. 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 48%, of the Inner Mongolia North Hauler stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Inner Mongolia North Hauler (at least 1 which is significant) , 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.