Retail investors in KEDE Numerical Control Co., Ltd. (SHSE:688305) are its biggest bettors, and their bets paid off as stock gained 5.7% last week

Key Insights

• The considerable ownership by retail investors in KEDE Numerical Control indicates that they collectively have a greater say in management and business strategy
• The top 6 shareholders own 51% of the company
• 18% of KEDE Numerical Control is held by insiders

A look at the shareholders of KEDE Numerical Control Co., Ltd. (SHSE:688305) can tell us which group is most powerful. With 35% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, retail investors collectively scored the highest last week as the company hit CN¥7.5b market cap following a 5.7% gain in the stock.

In the chart below, we zoom in on the different ownership groups of KEDE Numerical Control.

Check out our latest analysis for KEDE Numerical Control

What Does The Institutional Ownership Tell Us About KEDE Numerical Control?

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.

As you can see, institutional investors have a fair amount of stake in KEDE Numerical Control. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at KEDE Numerical Control's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in KEDE Numerical Control. Dalian Guangyang Technology Group Co., Ltd. is currently the largest shareholder, with 26% of shares outstanding. Benhong Yu is the second largest shareholder owning 9.3% of common stock, and Menglu Song holds about 5.2% of the company stock. Menglu Song, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of KEDE Numerical Control

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.

Our information suggests that insiders maintain a significant holding in KEDE Numerical Control Co., Ltd.. It is very interesting to see that insiders have a meaningful CN¥1.3b stake in this CN¥7.5b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 35% stake in KEDE Numerical Control. 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.

Private Company Ownership

We can see that Private Companies own 31%, 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. Take risks for example - KEDE Numerical Control has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

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.