Shenzhen Sosen Electronics Co.,Ltd.'s (SZSE:301002) most bullish insider, CEO Zongyou Wang must be pleased with the recent 23% gain

Key Insights

• Significant insider control over Shenzhen Sosen ElectronicsLtd implies vested interests in company growth
• 54% of the business is held by the top 3 shareholders
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

Every investor in Shenzhen Sosen Electronics Co.,Ltd. (SZSE:301002) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 55% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥398m last week.

Let's delve deeper into each type of owner of Shenzhen Sosen ElectronicsLtd, beginning with the chart below.

See our latest analysis for Shenzhen Sosen ElectronicsLtd

What Does The Institutional Ownership Tell Us About Shenzhen Sosen ElectronicsLtd?

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.

As you can see, institutional investors have a fair amount of stake in Shenzhen Sosen ElectronicsLtd. 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. 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 Shenzhen Sosen ElectronicsLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Shenzhen Sosen ElectronicsLtd. The company's CEO Zongyou Wang is the largest shareholder with 24% of shares outstanding. Nianbin Tian is the second largest shareholder owning 24% of common stock, and Xiamen Songsheng Investment Partnership Enterprise (Limited Partnership) holds about 5.0% of the company stock.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Shenzhen Sosen ElectronicsLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems that insiders own more than half the Shenzhen Sosen Electronics Co.,Ltd. stock. This gives them a lot of power. Given it has a market cap of CN¥2.2b, that means they have CN¥1.2b worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 32% stake in Shenzhen Sosen ElectronicsLtd. 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

We can see that Private Companies own 5.0%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

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. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Shenzhen Sosen ElectronicsLtd (of which 1 is significant!) you should know about.

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.

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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.