Insiders were the biggest winners as Hefei Metalforming Intelligent Manufacturing Co., Ltd.'s (SHSE:603011) market cap grew by CN¥826m last week

Key Insights

• Insiders appear to have a vested interest in Hefei Metalforming Intelligent Manufacturing's growth, as seen by their sizeable ownership
• 54% of the business is held by the top 6 shareholders
• 14% of Hefei Metalforming Intelligent Manufacturing is held by Institutions

To get a sense of who is truly in control of Hefei Metalforming Intelligent Manufacturing Co., Ltd. (SHSE:603011), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 39% ownership. 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¥4.7b market cap following a 21% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Hefei Metalforming Intelligent Manufacturing.

See our latest analysis for Hefei Metalforming Intelligent Manufacturing

What Does The Institutional Ownership Tell Us About Hefei Metalforming Intelligent Manufacturing?

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.

As you can see, institutional investors have a fair amount of stake in Hefei Metalforming Intelligent Manufacturing. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Hefei Metalforming Intelligent Manufacturing's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Hefei Metalforming Intelligent Manufacturing. Our data shows that Jianwen Yan is the largest shareholder with 30% of shares outstanding. The second and third largest shareholders are Hefei Construction Investment & Holding, Investment arm and Hefei Construction Investment and Holding Co.,Ltd., with an equal amount of shares to their name at 5.2%.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Hefei Metalforming Intelligent Manufacturing

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. 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.

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 most recent data indicates that insiders own a reasonable proportion of Hefei Metalforming Intelligent Manufacturing Co., Ltd.. Insiders have a CN¥1.8b stake in this CN¥4.7b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 32% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Equity Ownership

With a stake of 5.2%, private equity firms could influence the Hefei Metalforming Intelligent Manufacturing board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

Our data indicates that Private Companies hold 9.4%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Hefei Metalforming Intelligent Manufacturing has 2 warning signs we think you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.