The recent 14% gain must have brightened Top Key Executive Youqian Tang's week, Zhejiang Tiantai Xianghe Industrial Co.,Ltd.'s (SHSE:603500) most bullish insider

Key Insights

• Insiders appear to have a vested interest in Zhejiang Tiantai Xianghe IndustrialLtd's growth, as seen by their sizeable ownership
• A total of 6 investors have a majority stake in the company with 53% ownership
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of Zhejiang Tiantai Xianghe Industrial Co.,Ltd. (SHSE:603500), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 57% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥254m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Zhejiang Tiantai Xianghe IndustrialLtd.

See our latest analysis for Zhejiang Tiantai Xianghe IndustrialLtd

What Does The Institutional Ownership Tell Us About Zhejiang Tiantai Xianghe IndustrialLtd?

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.

Less than 5% of Zhejiang Tiantai Xianghe IndustrialLtd is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

We note that hedge funds don't have a meaningful investment in Zhejiang Tiantai Xianghe IndustrialLtd. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Zhejiang Tiantai Xianghe IndustrialLtd's case, its Top Key Executive, Youqian Tang, is the largest shareholder, holding 26% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.8% and 6.7% of the stock. Interestingly, the second and third-largest shareholders also happen to be the Senior Key Executive and Member of the Board of Directors, respectively. This once again signifies considerable insider ownership amongst the company's top shareholders. In addition, we found that Xiao Tang, the CEO has 6.7% of the shares allocated to their name.

We did some more digging and found that 6 of the top shareholders account for roughly 53% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Zhejiang Tiantai Xianghe IndustrialLtd

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.

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 the majority of Zhejiang Tiantai Xianghe Industrial Co.,Ltd.. This means they can collectively make decisions for the company. So they have a CN¥1.2b stake in this CN¥2.1b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 38% stake in Zhejiang Tiantai Xianghe IndustrialLtd. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Zhejiang Tiantai Xianghe IndustrialLtd (of which 1 is significant!) you should know about.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.