Recent 5.8% pullback would hurt Beijing Beimo High-tech Frictional Material Co.,Ltd (SZSE:002985) insiders

Key Insights

• Insiders appear to have a vested interest in Beijing Beimo High-tech Frictional MaterialLtd's growth, as seen by their sizeable ownership
• 51% of the business is held by the top 5 shareholders
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Beijing Beimo High-tech Frictional Material Co.,Ltd (SZSE:002985), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 51% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, insiders endured the biggest losses as the stock fell by 5.8%.

Let's delve deeper into each type of owner of Beijing Beimo High-tech Frictional MaterialLtd, beginning with the chart below.

See our latest analysis for Beijing Beimo High-tech Frictional MaterialLtd

What Does The Institutional Ownership Tell Us About Beijing Beimo High-tech Frictional MaterialLtd?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Beijing Beimo High-tech Frictional MaterialLtd 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. 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 Beijing Beimo High-tech Frictional MaterialLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Beijing Beimo High-tech Frictional MaterialLtd is not owned by hedge funds. Our data shows that Shuming Wang is the largest shareholder with 36% of shares outstanding. Jianfeng Chen is the second largest shareholder owning 10.0% of common stock, and Yingtan Daoxin Management Consulting Co., Ltd. holds about 2.3% of the company stock. Jianfeng Chen, who is the second-largest shareholder, also happens to hold the title of Senior Key Executive.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Beijing Beimo High-tech Frictional MaterialLtd

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems that insiders own more than half the Beijing Beimo High-tech Frictional Material Co.,Ltd stock. This gives them a lot of power. That means insiders have a very meaningful CN¥4.4b stake in this CN¥8.8b business. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

With a 37% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Beijing Beimo High-tech Frictional MaterialLtd. 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:

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. Be aware that Beijing Beimo High-tech Frictional MaterialLtd is showing 2 warning signs in our investment analysis , you should know about...

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.