Wintao Communications Co., Ltd.'s (SZSE:301139) 13% gain last week benefited both individual investors who own 49% as well as insiders

Key Insights

• The considerable ownership by individual investors in Wintao Communications indicates that they collectively have a greater say in management and business strategy
• The top 12 shareholders own 50% of the company
• Insider ownership in Wintao Communications is 39%

Every investor in Wintao Communications Co., Ltd. (SZSE:301139) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 49% 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¥349m market cap gain, insiders too had a 39% share in those profits.

Let's take a closer look to see what the different types of shareholders can tell us about Wintao Communications.

See our latest analysis for Wintao Communications

What Does The Institutional Ownership Tell Us About Wintao Communications?

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 Wintao Communications does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Wintao Communications' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Wintao Communications. Jin Li is currently the largest shareholder, with 27% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 6.6% and 5.2%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 12 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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. 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 Wintao Communications

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 Wintao Communications Co., Ltd.. It has a market capitalization of just CN¥3.0b, and insiders have CN¥1.2b worth of shares in their own names. 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, who are usually individual investors, hold a 49% stake in Wintao Communications. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 6.4%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Wintao Communications has 3 warning signs (and 2 which shouldn't be ignored) we think 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.