Genbyte Technology Inc.'s (SZSE:003028): Top Key Executive Zhijie Chen is the most bullish insider, and their stock value gained 18% last week

Key Insights

• Genbyte Technology's significant insider ownership suggests inherent interests in company's expansion
• 54% of the company is held by a single shareholder (Zhijie Chen)
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

A look at the shareholders of Genbyte Technology Inc. (SZSE:003028) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 69% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders were the biggest beneficiaries of last week’s 18% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Genbyte Technology.

View our latest analysis for Genbyte Technology

What Does The Institutional Ownership Tell Us About Genbyte Technology?

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.

We can see that Genbyte Technology 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 Genbyte Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Genbyte Technology. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Genbyte Technology's case, its Top Key Executive, Zhijie Chen, is the largest shareholder, holding 54% of shares outstanding. In comparison, the second and third largest shareholders hold about 14% and 5.5% of the stock. Interestingly, the second-largest shareholder, Juan Tang is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

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. 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 Genbyte Technology

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.

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 the majority of Genbyte Technology Inc.. This means they can collectively make decisions for the company. That means they own CN¥3.4b worth of shares in the CN¥5.0b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 20% 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.

Private Company Ownership

Our data indicates that Private Companies hold 6.0%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Genbyte Technology (of which 1 is potentially serious!) 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.