Yuhuan CNC Machine Tool Co.,Ltd.'s (SZSE:002903) market cap rose CN¥270m last week; individual investors who hold 50% profited and so did insiders

Key Insights

• Yuhuan CNC Machine ToolLtd's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 18 shareholders own 50% of the company
• 43% of Yuhuan CNC Machine ToolLtd is held by insiders

If you want to know who really controls Yuhuan CNC Machine Tool Co.,Ltd. (SZSE:002903), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual investors with 50% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Individual investors gained the most after market cap touched CN¥2.5b last week, while insiders who own 43% also benefitted.

In the chart below, we zoom in on the different ownership groups of Yuhuan CNC Machine ToolLtd.

View our latest analysis for Yuhuan CNC Machine ToolLtd

What Does The Institutional Ownership Tell Us About Yuhuan CNC Machine ToolLtd?

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.

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

Hedge funds don't have many shares in Yuhuan CNC Machine ToolLtd. Shi Xiong Xu is currently the largest shareholder, with 33% of shares outstanding. With 5.2% and 3.7% of the shares outstanding respectively, Yan Ming Xu and Liang Xu are the second and third largest shareholders. Two of the top three shareholders happen to be Chief Executive Officer and Member of the Board of Directors, respectively. That is, insiders feature higher up in the heirarchy of the company's top shareholders.

A closer look at our ownership figures suggests that the top 18 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Yuhuan CNC Machine ToolLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our most recent data indicates that insiders own a reasonable proportion of Yuhuan CNC Machine Tool Co.,Ltd.. Insiders own CN¥1.1b worth of shares in the CN¥2.5b company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 50% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Yuhuan CNC Machine ToolLtd , and understanding them should be part of your investment process.

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.

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