Chengdu Dahongli Machinery Co.,Ltd.'s (SZSE:300865) most bullish insider is Top Key Executive Dehong Gan, and their holdings value went up by 11% last week

Key Insights

• Chengdu Dahongli MachineryLtd's significant insider ownership suggests inherent interests in company's expansion
• Dehong Gan owns 69% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of Chengdu Dahongli Machinery Co.,Ltd. (SZSE:300865), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 71% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥157m last week.

In the chart below, we zoom in on the different ownership groups of Chengdu Dahongli MachineryLtd.

See our latest analysis for Chengdu Dahongli MachineryLtd

What Does The Institutional Ownership Tell Us About Chengdu Dahongli MachineryLtd?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Less than 5% of Chengdu Dahongli MachineryLtd is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Chengdu Dahongli MachineryLtd. From our data, we infer that the largest shareholder is Dehong Gan (who also holds the title of Top Key Executive) with 69% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. With 1.1% and 1.1% of the shares outstanding respectively, Dejun Gan and Chengdu Hongyuan Tongsheng Enterprise Management Center (Limited Partnership) are the second and third largest shareholders. Interestingly, the second-largest shareholder, Dejun Gan is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

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 Chengdu Dahongli MachineryLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems that insiders own more than half the Chengdu Dahongli Machinery Co.,Ltd. stock. This gives them a lot of power. So they have a CN¥1.1b stake in this CN¥1.6b business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Chengdu Dahongli MachineryLtd. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Chengdu Dahongli MachineryLtd better, we need to consider many other factors. For instance, we've identified 2 warning signs for Chengdu Dahongli MachineryLtd that you should be aware of.

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.

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

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