The recent 11% gain must have brightened CEO Min Huang's week, GoodWe Technologies Co., Ltd.'s (SHSE:688390) most bullish insider

Key Insights

• GoodWe Technologies' significant insider ownership suggests inherent interests in company's expansion
• 51% of the business is held by the top 7 shareholders
• 26% of GoodWe Technologies is held by Institutions

A look at the shareholders of GoodWe Technologies Co., Ltd. (SHSE:688390) can tell us which group is most powerful. The group holding the most number of shares in the company, around 43% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, insiders benefitted the most after the company's market cap rose by CN¥1.5b last week.

In the chart below, we zoom in on the different ownership groups of GoodWe Technologies.

See our latest analysis for GoodWe Technologies

What Does The Institutional Ownership Tell Us About GoodWe Technologies?

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 GoodWe Technologies 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 GoodWe Technologies, (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 GoodWe Technologies. With a 31% stake, CEO Min Huang is the largest shareholder. Hongping Lu is the second largest shareholder owning 4.6% of common stock, and China Asset Management Co. Ltd. holds about 4.3% of the company stock.

We did some more digging and found that 7 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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

Insider Ownership Of GoodWe Technologies

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.

Our most recent data indicates that insiders own a reasonable proportion of GoodWe Technologies Co., Ltd.. It is very interesting to see that insiders have a meaningful CN¥6.3b stake in this CN¥15b 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-- including retail investors -- own 31% 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 3 warning signs for GoodWe Technologies (1 is a bit unpleasant) that you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com