Yantai Eddie Precision Machinery Co., Ltd. (SHSE:603638) CEO Fei Song, the company's largest shareholder sees 5.0% reduction in holdings value

Key Insights

• Significant insider control over Yantai Eddie Precision Machinery implies vested interests in company growth
• The top 2 shareholders own 60% of the company
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

Every investor in Yantai Eddie Precision Machinery Co., Ltd. (SHSE:603638) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 66% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to CN¥14b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Yantai Eddie Precision Machinery, beginning with the chart below.

See our latest analysis for Yantai Eddie Precision Machinery

What Does The Institutional Ownership Tell Us About Yantai Eddie Precision Machinery?

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.

Since institutions own only a small portion of Yantai Eddie Precision Machinery, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Yantai Eddie Precision Machinery. With a 36% stake, CEO Fei Song is the largest shareholder. Xiao Feng is the second largest shareholder owning 23% of common stock, and Lei Wen holds about 6.5% of the company stock.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Yantai Eddie Precision Machinery

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.

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 the majority of Yantai Eddie Precision Machinery Co., Ltd.. This means they can collectively make decisions for the company. Given it has a market cap of CN¥14b, that means insiders have a whopping CN¥9.0b worth of shares in their own names. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

With a 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Yantai Eddie Precision Machinery. 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.

Private Company Ownership

We can see that Private Companies own 5.9%, 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:

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.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

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.

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.