Insiders were the biggest winners as Neway Valve (Suzhou) Co., Ltd.'s (SHSE:603699) market cap grew by CN¥1.4b last week

Key Insights

• Insiders appear to have a vested interest in Neway Valve (Suzhou)'s growth, as seen by their sizeable ownership
• 53% of the business is held by the top 4 shareholders
• Institutional ownership in Neway Valve (Suzhou) is 24%

To get a sense of who is truly in control of Neway Valve (Suzhou) Co., Ltd. (SHSE:603699), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 54% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit CN¥18b market cap following a 8.5% gain in the stock.

Let's delve deeper into each type of owner of Neway Valve (Suzhou), beginning with the chart below.

See our latest analysis for Neway Valve (Suzhou)

What Does The Institutional Ownership Tell Us About Neway Valve (Suzhou)?

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.

Neway Valve (Suzhou) already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Neway Valve (Suzhou)'s historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Neway Valve (Suzhou). The company's largest shareholder is Bao Wang, with ownership of 16%. With 16% and 11% of the shares outstanding respectively, Zhang Cheng and Bin Lu are the second and third largest shareholders.

On looking further, we found that 53% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Neway Valve (Suzhou)

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.

It seems that insiders own more than half the Neway Valve (Suzhou) Co., Ltd. stock. This gives them a lot of power. That means insiders have a very meaningful CN¥10.0b stake in this CN¥18b business. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

With a 21% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Neway Valve (Suzhou). 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.

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. Case in point: We've spotted 1 warning sign for Neway Valve (Suzhou) you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.