Shaanxi Construction Machinery Co.,Ltd's (SHSE:600984) stock price dropped 8.1% last week; individual investors would not be happy

Key Insights

• Shaanxi Construction MachineryLtd's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 25 investors have a majority stake in the company with 46% ownership
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

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Every investor in Shaanxi Construction Machinery Co.,Ltd (SHSE:600984) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 54% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, individual investors endured the biggest losses as the stock fell by 8.1%.

Let's delve deeper into each type of owner of Shaanxi Construction MachineryLtd, beginning with the chart below.

Check out our latest analysis for Shaanxi Construction MachineryLtd

What Does The Institutional Ownership Tell Us About Shaanxi Construction MachineryLtd?

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.

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

We note that hedge funds don't have a meaningful investment in Shaanxi Construction MachineryLtd. The company's largest shareholder is Shaanxi Coal and Chemical Industry Group Co.,Ltd., with ownership of 30%. With 5.5% and 4.0% of the shares outstanding respectively, Zhao Yi Chai and Shaanxi Construction Machinery (Group) Co., Ltd. are the second and third largest shareholders.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Shaanxi Construction MachineryLtd

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 most recent data indicates that insiders own some shares in Shaanxi Construction Machinery Co.,Ltd. As individuals, the insiders collectively own CN¥346m worth of the CN¥4.6b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 54% of Shaanxi Construction MachineryLtd shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Company Ownership

We can see that Private Companies own 34%, of the shares on issue. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Shaanxi Construction MachineryLtd is showing 2 warning signs in our investment analysis , you should know about...

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.