Following a 6.2% decline over last year, recent gains may please Guizhou Aviation Technical Development Co., Ltd (SHSE:688239) institutional owners

Key Insights

• Institutions' substantial holdings in Guizhou Aviation Technical Development implies that they have significant influence over the company's share price
• A total of 14 investors have a majority stake in the company with 51% ownership
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of Guizhou Aviation Technical Development Co., Ltd (SHSE:688239), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 35% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).

Institutional investors would probably welcome last week's 11% increase in the share price after a year of 6.2% losses as a sign that returns may to begin trending higher.

In the chart below, we zoom in on the different ownership groups of Guizhou Aviation Technical Development.

View our latest analysis for Guizhou Aviation Technical Development

What Does The Institutional Ownership Tell Us About Guizhou Aviation Technical Development?

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 Guizhou Aviation Technical Development 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. 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 Guizhou Aviation Technical Development's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Guizhou Aviation Technical Development. Shandong Huaigu Enterprise Management Co., Ltd. is currently the largest shareholder, with 22% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.4% and 4.3%, of the shares outstanding, respectively. In addition, we found that Manyu Lu, the CEO has 1.8% of the shares allocated to their name.

After doing some more digging, we found that the top 14 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Guizhou Aviation Technical Development

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

We can report that insiders do own shares in Guizhou Aviation Technical Development Co., Ltd. As individuals, the insiders collectively own CN¥524m worth of the CN¥5.7b company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 34% stake in Guizhou Aviation Technical Development. 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

Our data indicates that Private Companies hold 22%, of the company's shares. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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.