Insiders were the key beneficiaries as Qingdao Victall Railway Co., Ltd.'s (SHSE:605001) market cap rises to CN¥2.8b

Key Insights

• Qingdao Victall Railway's significant insider ownership suggests inherent interests in company's expansion
• A total of 3 investors have a majority stake in the company with 52% ownership
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Qingdao Victall Railway Co., Ltd. (SHSE:605001), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 38% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥259m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Qingdao Victall Railway.

See our latest analysis for Qingdao Victall Railway

What Does The Institutional Ownership Tell Us About Qingdao Victall Railway?

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.

We can see that Qingdao Victall Railway 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. 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 Qingdao Victall Railway, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Qingdao Victall Railway. Looking at our data, we can see that the largest shareholder is Hanben Sun with 35% of shares outstanding. In comparison, the second and third largest shareholders hold about 13% and 4.2% of the stock. Furthermore, CEO Jilong Sun is the owner of 3.5% of the company's shares.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Qingdao Victall Railway

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Our most recent data indicates that insiders own a reasonable proportion of Qingdao Victall Railway Co., Ltd.. Insiders have a CN¥1.1b stake in this CN¥2.8b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 36% stake in the company, and hence can't easily be ignored. 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

We can see that Private Companies own 18%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Qingdao Victall Railway you should know about.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.