Sichuan Tianwei Electronic Co.,Ltd.'s (SHSE:688511) market cap increased by CN¥256m, insiders receive a 70% cut

Key Insights

• Sichuan Tianwei ElectronicLtd's significant insider ownership suggests inherent interests in company's expansion
• Wanli Ju owns 56% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

A look at the shareholders of Sichuan Tianwei Electronic Co.,Ltd. (SHSE:688511) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 70% ownership. 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¥256m last week.

In the chart below, we zoom in on the different ownership groups of Sichuan Tianwei ElectronicLtd.

Check out our latest analysis for Sichuan Tianwei ElectronicLtd

What Does The Institutional Ownership Tell Us About Sichuan Tianwei ElectronicLtd?

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.

We can see that Sichuan Tianwei ElectronicLtd 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 Sichuan Tianwei ElectronicLtd, (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 Sichuan Tianwei ElectronicLtd. The company's largest shareholder is Wanli Ju, with ownership of 56%. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. For context, the second largest shareholder holds about 6.4% of the shares outstanding, followed by an ownership of 5.5% by the third-largest shareholder. Chao Zhang, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Sichuan Tianwei ElectronicLtd

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. 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.

Our information suggests that insiders own more than half of Sichuan Tianwei Electronic Co.,Ltd.. This gives them effective control of the company. That means they own CN¥1.6b worth of shares in the CN¥2.2b 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

With a 21% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sichuan Tianwei ElectronicLtd. 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 Sichuan Tianwei ElectronicLtd better, we need to consider many other factors. For instance, we've identified 5 warning signs for Sichuan Tianwei ElectronicLtd (3 can't be ignored) that you should be aware of.

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.