Jiangsu Tongguang Electronic Wire & Cable Co., Ltd.'s (SZSE:300265) market cap dropped CN¥642m last week; Retail investors bore the brunt

Key Insights

• Jiangsu Tongguang Electronic Wire & Cable's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 50% of the business is held by the top 4 shareholders
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

Every investor in Jiangsu Tongguang Electronic Wire & Cable Co., Ltd. (SZSE:300265) should be aware of the most powerful shareholder groups. With 42% stake, retail investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 16% decline in share price, retail investors suffered the most losses.

Let's delve deeper into each type of owner of Jiangsu Tongguang Electronic Wire & Cable, beginning with the chart below.

See our latest analysis for Jiangsu Tongguang Electronic Wire & Cable

What Does The Institutional Ownership Tell Us About Jiangsu Tongguang Electronic Wire & Cable?

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.

Jiangsu Tongguang Electronic Wire & Cable already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Jiangsu Tongguang Electronic Wire & Cable's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Jiangsu Tongguang Electronic Wire & Cable. Looking at our data, we can see that the largest shareholder is Tongguang Group Company Limited with 40% of shares outstanding. The second and third largest shareholders are Zhong Zhang and Zhong Zhang, with an equal amount of shares to their name at 4.5%. Zhong Zhang, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

On looking further, we found that 50% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. 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 Jiangsu Tongguang Electronic Wire & Cable

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

We can report that insiders do own shares in Jiangsu Tongguang Electronic Wire & Cable Co., Ltd.. In their own names, insiders own CN¥318m worth of stock in the CN¥3.4b company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 42% stake in Jiangsu Tongguang Electronic Wire & Cable. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

Our data indicates that Private Companies hold 41%, of the company's shares. 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:

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 Jiangsu Tongguang Electronic Wire & Cable is showing 2 warning signs in our investment analysis , you should know about...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.