With 47% ownership, Zhejiang Dingli Machinery Co.,Ltd (SHSE:603338) insiders have a lot riding on the company's future

Key Insights

• Insiders appear to have a vested interest in Zhejiang Dingli MachineryLtd's growth, as seen by their sizeable ownership
• The top 2 shareholders own 56% of the company
• Institutions own 22% of Zhejiang Dingli MachineryLtd

Every investor in Zhejiang Dingli Machinery Co.,Ltd (SHSE:603338) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 47% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

So, insiders of Zhejiang Dingli MachineryLtd have a lot at stake and every decision they make on the company’s future is important to them from a financial point of view.

In the chart below, we zoom in on the different ownership groups of Zhejiang Dingli MachineryLtd.

Check out our latest analysis for Zhejiang Dingli MachineryLtd

What Does The Institutional Ownership Tell Us About Zhejiang Dingli MachineryLtd?

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 Zhejiang Dingli MachineryLtd does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Zhejiang Dingli MachineryLtd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Zhejiang Dingli MachineryLtd. Shu Gen Xu is currently the company's largest shareholder with 46% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 11% and 2.9%, of the shares outstanding, respectively.

To make our study more interesting, we found that the top 2 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 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 Zhejiang Dingli MachineryLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

It seems insiders own a significant proportion of Zhejiang Dingli Machinery Co.,Ltd. It is very interesting to see that insiders have a meaningful CN¥15b stake in this CN¥32b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 20% stake in Zhejiang Dingli MachineryLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 11%, of the company's shares. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we've spotted with Zhejiang Dingli MachineryLtd .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.