The recent CN¥444m market cap decrease is likely to have disappointed insiders invested in Sichuan Zigong Conveying Machine Group Co., Ltd. (SZSE:001288)

Key Insights

• Insiders appear to have a vested interest in Sichuan Zigong Conveying Machine Group's growth, as seen by their sizeable ownership
• A total of 2 investors have a majority stake in the company with 59% ownership
• Institutions own 12% of Sichuan Zigong Conveying Machine Group

If you want to know who really controls Sichuan Zigong Conveying Machine Group Co., Ltd. (SZSE:001288), then you'll have to look at the makeup of its share registry. With 49% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 10% decline in share price, insiders suffered the most losses.

Let's delve deeper into each type of owner of Sichuan Zigong Conveying Machine Group, beginning with the chart below.

Check out our latest analysis for Sichuan Zigong Conveying Machine Group

What Does The Institutional Ownership Tell Us About Sichuan Zigong Conveying Machine Group?

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.

As you can see, institutional investors have a fair amount of stake in Sichuan Zigong Conveying Machine Group. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Zigong Conveying Machine Group, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Sichuan Zigong Conveying Machine Group. The company's largest shareholder is Youhua Wu, with ownership of 48%. Meanwhile, the second and third largest shareholders, hold 11% and 6.3%, of the shares outstanding, respectively.

To make our study more interesting, we found that the top 2 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 Sichuan Zigong Conveying Machine Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems insiders own a significant proportion of Sichuan Zigong Conveying Machine Group Co., Ltd.. It has a market capitalization of just CN¥3.9b, and insiders have CN¥1.9b worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 21% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 18%, 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. For instance, we've identified 2 warning signs for Sichuan Zigong Conveying Machine Group (1 is a bit concerning) 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.

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