Retail investors are Zhejiang RIFA Precision Machinery Co., Ltd.'s (SZSE:002520) biggest owners and were hit after market cap dropped CN¥723m

Key Insights

• Zhejiang RIFA Precision Machinery's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 18 investors have a majority stake in the company with 45% ownership
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Zhejiang RIFA Precision Machinery Co., Ltd. (SZSE:002520) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 55% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, retail investors endured the biggest losses as the stock fell by 11%.

Let's delve deeper into each type of owner of Zhejiang RIFA Precision Machinery, beginning with the chart below.

Check out our latest analysis for Zhejiang RIFA Precision Machinery

What Does The Institutional Ownership Tell Us About Zhejiang RIFA Precision Machinery?

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 Zhejiang RIFA Precision Machinery 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 Zhejiang RIFA Precision Machinery, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Zhejiang RIFA Precision Machinery. Our data shows that Zhejiang Rifa Holding Group Co.,Ltd is the largest shareholder with 29% of shares outstanding. Jie Wu is the second largest shareholder owning 5.9% of common stock, and Hangzhou Jintou Asset Management Co., Ltd. holds about 3.7% of the company stock.

On studying our ownership data, we found that 18 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Zhejiang RIFA Precision Machinery

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

We can report that insiders do own shares in Zhejiang RIFA Precision Machinery Co., Ltd.. As individuals, the insiders collectively own CN¥503m worth of the CN¥5.7b company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 55% of Zhejiang RIFA Precision Machinery shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

It seems that Private Companies own 29%, of the Zhejiang RIFA Precision Machinery stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private 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. To that end, you should be aware of the 2 warning signs we've spotted with Zhejiang RIFA Precision Machinery .

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.