The recent 11% gain must have brightened CEO Zhiqiang Sun's week, Guangzhou Risong Intelligent Technology Holding Co., Ltd.'s (SHSE:688090) most bullish insider

Key Insights

• Insiders appear to have a vested interest in Guangzhou Risong Intelligent Technology Holding's growth, as seen by their sizeable ownership
• 50% of the business is held by the top 6 shareholders
• Institutional ownership in Guangzhou Risong Intelligent Technology Holding is 11%

Every investor in Guangzhou Risong Intelligent Technology Holding Co., Ltd. (SHSE:688090) should be aware of the most powerful shareholder groups. With 51% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit CN¥1.8b market cap following a 11% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about Guangzhou Risong Intelligent Technology Holding.

Check out our latest analysis for Guangzhou Risong Intelligent Technology Holding

What Does The Institutional Ownership Tell Us About Guangzhou Risong Intelligent Technology Holding?

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.

Guangzhou Risong Intelligent Technology Holding already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Guangzhou Risong Intelligent Technology Holding'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 Guangzhou Risong Intelligent Technology Holding. The company's CEO Zhiqiang Sun is the largest shareholder with 30% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.7% and 5.0% of the stock.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. 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 Guangzhou Risong Intelligent Technology Holding

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.

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 Guangzhou Risong Intelligent Technology Holding Co., Ltd.. This means they can collectively make decisions for the company. That means they own CN¥910m worth of shares in the CN¥1.8b company. That's quite meaningful. 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 Guangzhou Risong Intelligent Technology Holding. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Guangzhou Risong Intelligent Technology Holding better, we need to consider many other factors. Be aware that Guangzhou Risong Intelligent Technology Holding is showing 4 warning signs in our investment analysis , and 1 of those is significant...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.