Suzhou Secote Precision Electronic Co.,LTD (SHSE:603283) CEO Feng Sun, the company's largest shareholder sees 4.0% reduction in holdings value

Key Insights

• Insiders appear to have a vested interest in Suzhou Secote Precision ElectronicLTD's growth, as seen by their sizeable ownership
• A total of 3 investors have a majority stake in the company with 51% ownership
• Institutions own 28% of Suzhou Secote Precision ElectronicLTD

Every investor in Suzhou Secote Precision Electronic Co.,LTD (SHSE:603283) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 43% ownership. 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¥10b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Suzhou Secote Precision ElectronicLTD.

Check out our latest analysis for Suzhou Secote Precision ElectronicLTD

What Does The Institutional Ownership Tell Us About Suzhou Secote Precision ElectronicLTD?

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 Suzhou Secote Precision ElectronicLTD does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Suzhou Secote Precision ElectronicLTD's earnings history below. Of course, the future is what really matters.

Suzhou Secote Precision ElectronicLTD is not owned by hedge funds. The company's CEO Feng Sun is the largest shareholder with 21% of shares outstanding. For context, the second largest shareholder holds about 21% of the shares outstanding, followed by an ownership of 8.9% by the third-largest shareholder.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Suzhou Secote Precision ElectronicLTD

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own a reasonable proportion of Suzhou Secote Precision Electronic Co.,LTD. It is very interesting to see that insiders have a meaningful CN¥4.5b stake in this CN¥10b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 29% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

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 risks, for instance. Every company has them, and we've spotted 1 warning sign for Suzhou Secote Precision ElectronicLTD 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.

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.