Individual investors who hold 51% of Jiangsu NanFang Precision Co.,Ltd. (SZSE:002553) gained 7.6%, insiders profited as well

Key Insights

• Significant control over Jiangsu NanFang PrecisionLtd by individual investors implies that the general public has more power to influence management and governance-related decisions
• 49% of the business is held by the top 21 shareholders
• 39% of Jiangsu NanFang PrecisionLtd is held by insiders

Every investor in Jiangsu NanFang Precision Co.,Ltd. (SZSE:002553) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 51% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

While individual investors were the group that reaped the most benefits after last week’s 7.6% price gain, insiders also received a 39% cut.

Let's delve deeper into each type of owner of Jiangsu NanFang PrecisionLtd, beginning with the chart below.

See our latest analysis for Jiangsu NanFang PrecisionLtd

What Does The Institutional Ownership Tell Us About Jiangsu NanFang PrecisionLtd?

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.

Jiangsu NanFang PrecisionLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Jiangsu NanFang PrecisionLtd'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 Jiangsu NanFang PrecisionLtd. Looking at our data, we can see that the largest shareholder is Jianwei Shi with 35% of shares outstanding. With 5.0% and 2.6% of the shares outstanding respectively, Shanghai Jiahong Private Fund Management Co., Ltd. and Wei Shi are the second and third largest shareholders. Wei Shi, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

A deeper look at our ownership data shows that the top 21 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. 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 Jiangsu NanFang PrecisionLtd

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.

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 maintain a significant holding in Jiangsu NanFang Precision Co.,Ltd.. Insiders own CN¥2.1b worth of shares in the CN¥5.3b company. 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, who are usually individual investors, hold a substantial 51% stake in Jiangsu NanFang PrecisionLtd, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Jiangsu NanFang PrecisionLtd better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Jiangsu NanFang PrecisionLtd you should be aware of, and 1 of them makes us a bit uncomfortable.

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.

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

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.