Guangdong Rifeng Electric Cable Co., Ltd. (SZSE:002953) adds CN¥433m in market cap and insiders have a 58% stake in that gain

Key Insights

• Guangdong Rifeng Electric Cable's significant insider ownership suggests inherent interests in company's expansion
• The largest shareholder of the company is Jiujing Feng with a 55% stake
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Guangdong Rifeng Electric Cable Co., Ltd. (SZSE:002953) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 58% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥433m last week.

Let's delve deeper into each type of owner of Guangdong Rifeng Electric Cable, beginning with the chart below.

View our latest analysis for Guangdong Rifeng Electric Cable

What Does The Institutional Ownership Tell Us About Guangdong Rifeng Electric Cable?

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.

Institutions have a very small stake in Guangdong Rifeng Electric Cable. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Guangdong Rifeng Electric Cable. The company's largest shareholder is Jiujing Feng, with ownership of 55%. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. For context, the second largest shareholder holds about 2.2% of the shares outstanding, followed by an ownership of 1.4% by the third-largest shareholder. Qiang Li, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Guangdong Rifeng Electric Cable

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own the majority of Guangdong Rifeng Electric Cable Co., Ltd.. This means they can collectively make decisions for the company. That means they own CN¥3.2b worth of shares in the CN¥5.6b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 38% stake in Guangdong Rifeng Electric Cable. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Guangdong Rifeng Electric Cable has 2 warning signs (and 1 which is concerning) we think you should know about.

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.