Both private companies who control a good portion of Zhuhai CosMX Battery Co., Ltd. (SHSE:688772) along with institutions must be dismayed after last week's 8.3% decrease

Key Insights

• The considerable ownership by private companies in Zhuhai CosMX Battery indicates that they collectively have a greater say in management and business strategy
• A total of 11 investors have a majority stake in the company with 52% ownership
• Institutions own 31% of Zhuhai CosMX Battery

A look at the shareholders of Zhuhai CosMX Battery Co., Ltd. (SHSE:688772) can tell us which group is most powerful. We can see that private companies own the lion's share in the company with 33% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 8.3% decrease in the stock price last week, private companies suffered the most losses, but institutions who own 31% stock also took a hit.

Let's delve deeper into each type of owner of Zhuhai CosMX Battery, beginning with the chart below.

See our latest analysis for Zhuhai CosMX Battery

What Does The Institutional Ownership Tell Us About Zhuhai CosMX Battery?

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.

Zhuhai CosMX Battery already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Zhuhai CosMX Battery's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Zhuhai CosMX Battery. Looking at our data, we can see that the largest shareholder is Zhuhai Puruida Investment Co., Ltd. with 18% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.0% and 5.7% of the stock.

After doing some more digging, we found that the top 11 have the combined ownership of 52% in the company, suggesting that no single shareholder has significant control over 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Zhuhai CosMX Battery

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.

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 see that insiders own shares in Zhuhai CosMX Battery Co., Ltd.. The insiders have a meaningful stake worth CN¥177m. Most would see this as a real positive. If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 26% stake in the company, and hence can't easily be ignored. 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 Equity Ownership

With an ownership of 8.0%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

It seems that Private Companies own 33%, of the Zhuhai CosMX Battery stock. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Be aware that Zhuhai CosMX Battery is showing 2 warning signs in our investment analysis , you should know about...

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.