Inventronics (Hangzhou), Inc.'s (SZSE:300582) market cap rose CN¥651m last week; individual investors who hold 60% profited and so did insiders

Key Insights

• The considerable ownership by individual investors in Inventronics (Hangzhou) indicates that they collectively have a greater say in management and business strategy
• 40% of the business is held by the top 25 shareholders
• Insiders own 34% of Inventronics (Hangzhou)

Every investor in Inventronics (Hangzhou), Inc. (SZSE:300582) should be aware of the most powerful shareholder groups. With 60% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Individual investors gained the most after market cap touched CN¥3.1b last week, while insiders who own 34% also benefitted.

In the chart below, we zoom in on the different ownership groups of Inventronics (Hangzhou).

View our latest analysis for Inventronics (Hangzhou)

What Does The Institutional Ownership Tell Us About Inventronics (Hangzhou)?

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

We note that hedge funds don't have a meaningful investment in Inventronics (Hangzhou). Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Inventronics (Hangzhou)'s case, its Top Key Executive, Guichao Hua, is the largest shareholder, holding 34% of shares outstanding. National Council for Social Security Fund is the second largest shareholder owning 1.8% of common stock, and Gui Lin Hua holds about 0.5% of the company stock. Interestingly, the third-largest shareholder, Gui Lin Hua is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Inventronics (Hangzhou)

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.

It seems insiders own a significant proportion of Inventronics (Hangzhou), Inc.. Insiders have a CN¥1.1b stake in this CN¥3.1b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 60% of Inventronics (Hangzhou). This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

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. Case in point: We've spotted 3 warning signs for Inventronics (Hangzhou) 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.

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