Individual investors are Changshu Tianyin Electromechanical Co.,Ltd's (SZSE:300342) biggest owners and were rewarded after market cap rose by CN¥765m last week

Key Insights

• Significant control over Changshu Tianyin ElectromechanicalLtd by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 25 shareholders own 42% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Changshu Tianyin Electromechanical Co.,Ltd (SZSE:300342) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 58% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, individual investors collectively scored the highest last week as the company hit CN¥7.0b market cap following a 12% gain in the stock.

Let's delve deeper into each type of owner of Changshu Tianyin ElectromechanicalLtd, beginning with the chart below.

See our latest analysis for Changshu Tianyin ElectromechanicalLtd

What Does The Institutional Ownership Tell Us About Changshu Tianyin ElectromechanicalLtd?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Changshu Tianyin ElectromechanicalLtd 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Changshu Tianyin ElectromechanicalLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Changshu Tianyin ElectromechanicalLtd is not owned by hedge funds. Foshan Lanhai Ruixing Equity Investment Partnership Enterprise (Limited Partnership) is currently the largest shareholder, with 29% of shares outstanding. In comparison, the second and third largest shareholders hold about 2.3% and 2.2% of the stock. Two of the top three shareholders happen to be Chief Executive Officer and Member of the Board of Directors, respectively. That is, insiders feature higher up in the heirarchy of the company's top shareholders.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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 Changshu Tianyin ElectromechanicalLtd

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. 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.

We can see that insiders own shares in Changshu Tianyin Electromechanical Co.,Ltd. As individuals, the insiders collectively own CN¥379m worth of the CN¥7.0b 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, who are usually individual investors, hold a substantial 58% stake in Changshu Tianyin ElectromechanicalLtd, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Company Ownership

It seems that Private Companies own 31%, of the Changshu Tianyin ElectromechanicalLtd 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 4 warning signs for Changshu Tianyin ElectromechanicalLtd (2 are concerning) that you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com