Xiangyang BOYA Precision Industrial Equipments Co., Ltd's (SZSE:300971) market cap up CN¥170m last week, benefiting both individual investors who own 54% as well as insiders

Key Insights

• Xiangyang BOYA Precision Industrial Equipments' significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 46% of the business is held by the top 25 shareholders
• 35% of Xiangyang BOYA Precision Industrial Equipments is held by insiders

Every investor in Xiangyang BOYA Precision Industrial Equipments Co., Ltd (SZSE:300971) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 54% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While individual investors were the group that benefitted the most from last week’s CN¥170m market cap gain, insiders too had a 35% share in those profits.

In the chart below, we zoom in on the different ownership groups of Xiangyang BOYA Precision Industrial Equipments.

Check out our latest analysis for Xiangyang BOYA Precision Industrial Equipments

What Does The Institutional Ownership Tell Us About Xiangyang BOYA Precision Industrial Equipments?

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.

We can see that Xiangyang BOYA Precision Industrial Equipments 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 Xiangyang BOYA Precision Industrial Equipments' historic earnings and revenue below, but keep in mind there's always more to the story.

Xiangyang BOYA Precision Industrial Equipments is not owned by hedge funds. The company's CEO Wenxi Li is the largest shareholder with 29% of shares outstanding. In comparison, the second and third largest shareholders hold about 3.4% and 2.9% of the stock.

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.

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

Insider Ownership Of Xiangyang BOYA Precision Industrial Equipments

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.

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.

Our most recent data indicates that insiders own a reasonable proportion of Xiangyang BOYA Precision Industrial Equipments Co., Ltd. Insiders have a CN¥561m stake in this CN¥1.6b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 54% stake in Xiangyang BOYA Precision Industrial Equipments, 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.

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 Xiangyang BOYA Precision Industrial Equipments is showing 3 warning signs in our investment analysis , and 2 of those are a bit unpleasant...

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.