Insiders were the key beneficiaries as Zhe Jiang Headman Machinery Co.,Ltd.'s (SHSE:688577) market cap rises to CN¥4.0b

Key Insights

• Zhe Jiang Headman MachineryLtd's significant insider ownership suggests inherent interests in company's expansion
• The top 3 shareholders own 53% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of Zhe Jiang Headman Machinery Co.,Ltd. (SHSE:688577), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 53% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit CN¥4.0b 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 Zhe Jiang Headman MachineryLtd.

See our latest analysis for Zhe Jiang Headman MachineryLtd

What Does The Institutional Ownership Tell Us About Zhe Jiang Headman MachineryLtd?

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.

As you can see, institutional investors have a fair amount of stake in Zhe Jiang Headman MachineryLtd. 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 Zhe Jiang Headman MachineryLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Zhe Jiang Headman MachineryLtd. Looking at our data, we can see that the largest shareholder is Changquan Gao with 24% of shares outstanding. Zhaochun Gao is the second largest shareholder owning 17% of common stock, and Xiuhua Guo holds about 12% of the company stock. Xiuhua Guo, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 Zhe Jiang Headman MachineryLtd

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 most recent data indicates that insiders own the majority of Zhe Jiang Headman Machinery Co.,Ltd.. This means they can collectively make decisions for the company. That means they own CN¥2.1b worth of shares in the CN¥4.0b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 30% stake in Zhe Jiang Headman MachineryLtd. 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 10%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Zhe Jiang Headman MachineryLtd better, we need to consider many other factors. For example, we've discovered 4 warning signs for Zhe Jiang Headman MachineryLtd (2 are concerning!) that you should be aware of before investing here.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.