Aurora Optoelectronics Co.,Ltd.'s (SHSE:600666) market cap dropped CN¥912m last week; Individual investors bore the brunt

Key Insights

• Significant control over Aurora OptoelectronicsLtd by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 23 shareholders own 43% of the company
• 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 Aurora Optoelectronics Co.,Ltd. (SHSE:600666), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 57% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As market cap fell to CN¥7.1b last week, individual investors would have faced the highest losses than any other shareholder groups of the company.

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

Check out our latest analysis for Aurora OptoelectronicsLtd

What Does The Institutional Ownership Tell Us About Aurora OptoelectronicsLtd?

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.

We can see that Aurora OptoelectronicsLtd 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 Aurora OptoelectronicsLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Aurora OptoelectronicsLtd is not owned by hedge funds. Qingdao Intelligent Computing Information Industry Development Partnership Enterprise (LP) is currently the largest shareholder, with 13% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.2% and 5.5% of the stock.

On studying our ownership data, we found that 23 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. 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 Aurora OptoelectronicsLtd

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.

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.

We can report that insiders do own shares in Aurora Optoelectronics Co.,Ltd.. It has a market capitalization of just CN¥7.1b, and insiders have CN¥647m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 57% of Aurora OptoelectronicsLtd. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

We can see that Private Companies own 19%, of the shares on issue. 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.

Public Company Ownership

It appears to us that public companies own 9.2% of Aurora OptoelectronicsLtd. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Aurora OptoelectronicsLtd you should be aware of, and 1 of them shouldn't be ignored.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.