Private companies in Inner Mongolia First Machinery Group Co.,Ltd. (SHSE:600967) are its biggest bettors, and their bets paid off as stock gained 3.8% last week

Key Insights

• The considerable ownership by private companies in Inner Mongolia First Machinery GroupLtd indicates that they collectively have a greater say in management and business strategy
• The top 2 shareholders own 57% of the company
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

Every investor in Inner Mongolia First Machinery Group Co.,Ltd. (SHSE:600967) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private companies with 45% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, private companies benefitted the most after the company's market cap rose by CN¥545m last week.

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

Check out our latest analysis for Inner Mongolia First Machinery GroupLtd

What Does The Institutional Ownership Tell Us About Inner Mongolia First Machinery GroupLtd?

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.

Inner Mongolia First Machinery GroupLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 First Machinery GroupLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Inner Mongolia First Machinery GroupLtd is not owned by hedge funds. China North Industries Group Corporation Limited is currently the largest shareholder, with 45% of shares outstanding. North Industries Group Investment Management Company LTD. is the second largest shareholder owning 12% of common stock, and China Southern Asset Management Co., Ltd. holds about 1.3% of the company stock.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 57% stake.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 Inner Mongolia First Machinery GroupLtd

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.

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 data suggests that insiders own under 1% of Inner Mongolia First Machinery Group Co.,Ltd. in their own names. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around CN¥13m worth of shares (at current prices). Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 36% stake in Inner Mongolia First Machinery GroupLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With a stake of 12%, private equity firms could influence the Inner Mongolia First Machinery GroupLtd board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

Our data indicates that Private Companies hold 45%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private 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. Take risks for example - Inner Mongolia First Machinery GroupLtd has 2 warning signs (and 1 which is significant) we think you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.