CECEP Techand Ecology&Environment Co.,Ltd.'s (SZSE:300197) last week's 9.4% decline must have disappointed individual investors who have a significant stake

Key Insights

• The considerable ownership by individual investors in CECEP Techand Ecology&EnvironmentLtd indicates that they collectively have a greater say in management and business strategy
• A total of 8 investors have a majority stake in the company with 51% ownership
• Institutional ownership in CECEP Techand Ecology&EnvironmentLtd is 12%

Every investor in CECEP Techand Ecology&Environment Co.,Ltd. (SZSE:300197) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 47% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 9.4% decline in share price, individual investors suffered the most losses.

In the chart below, we zoom in on the different ownership groups of CECEP Techand Ecology&EnvironmentLtd.

View our latest analysis for CECEP Techand Ecology&EnvironmentLtd

What Does The Institutional Ownership Tell Us About CECEP Techand Ecology&EnvironmentLtd?

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 CECEP Techand Ecology&EnvironmentLtd does have institutional investors; and they hold a good portion of the company's stock. 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. 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 CECEP Techand Ecology&EnvironmentLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in CECEP Techand Ecology&EnvironmentLtd. Looking at our data, we can see that the largest shareholder is China Energy Conservation and Environmental Protection Group with 25% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 9.1% and 4.0%, of the shares outstanding, respectively.

We did some more digging and found that 8 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. 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 CECEP Techand Ecology&EnvironmentLtd

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

Our most recent data indicates that insiders own some shares in CECEP Techand Ecology&Environment Co.,Ltd.. As individuals, the insiders collectively own CN¥420m worth of the CN¥4.6b company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 47% stake in the company, and hence can't easily be ignored. 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.

Private Company Ownership

It seems that Private Companies own 32%, of the CECEP Techand Ecology&EnvironmentLtd stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand CECEP Techand Ecology&EnvironmentLtd better, we need to consider many other factors. For instance, we've identified 2 warning signs for CECEP Techand Ecology&EnvironmentLtd (1 can't be ignored) that you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.