The recent CN¥487m market cap decrease is likely to have disappointed insiders invested in Neway Valve (Suzhou) Co., Ltd. (SHSE:603699)

Key Insights

• Neway Valve (Suzhou)'s significant insider ownership suggests inherent interests in company's expansion
• A total of 4 investors have a majority stake in the company with 54% ownership
• Institutions own 23% of Neway Valve (Suzhou)

Every investor in Neway Valve (Suzhou) Co., Ltd. (SHSE:603699) should be aware of the most powerful shareholder groups. 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 as a group endured the highest losses after market cap fell by CN¥487m.

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

Check out our latest analysis for Neway Valve (Suzhou)

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

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 Neway Valve (Suzhou) 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Neway Valve (Suzhou), (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Neway Valve (Suzhou). The company's largest shareholder is Zhang Cheng, with ownership of 16%. With 16% and 11% of the shares outstanding respectively, Bao Wang and Chao Xi are the second and third largest shareholders.

Our research also brought to light the fact that roughly 54% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Neway Valve (Suzhou)

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 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¥7.8b stake in this CN¥14b business. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 21% stake in the company, and hence can't easily be ignored. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Neway Valve (Suzhou) you should know about.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

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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.