The recent CN¥290m market cap decrease is likely to have disappointed insiders invested in Beijing ZEHO Waterfront Ecological Environment Treatment Co., Ltd. (SHSE:605069)

Key Insights

• Insiders appear to have a vested interest in Beijing ZEHO Waterfront Ecological Environment Treatment's growth, as seen by their sizeable ownership
• Yijun Zhang owns 58% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Beijing ZEHO Waterfront Ecological Environment Treatment Co., Ltd. (SHSE:605069) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 61% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to CN¥1.7b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's take a closer look to see what the different types of shareholders can tell us about Beijing ZEHO Waterfront Ecological Environment Treatment.

View our latest analysis for Beijing ZEHO Waterfront Ecological Environment Treatment

What Does The Institutional Ownership Tell Us About Beijing ZEHO Waterfront Ecological Environment Treatment?

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.

Beijing ZEHO Waterfront Ecological Environment Treatment already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Beijing ZEHO Waterfront Ecological Environment Treatment, (below). Of course, keep in mind that there are other factors to consider, too.

Beijing ZEHO Waterfront Ecological Environment Treatment is not owned by hedge funds. Our data shows that Yijun Zhang is the largest shareholder with 58% of shares outstanding. This implies that they have majority interest control of the future of the company. In comparison, the second and third largest shareholders hold about 3.3% and 2.0% of the stock. Additionally, the company's CEO Huipeng Zhang directly holds 0.5% of the total shares outstanding.

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 Beijing ZEHO Waterfront Ecological Environment Treatment

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 Beijing ZEHO Waterfront Ecological Environment Treatment Co., Ltd. stock. This gives them a lot of power. That means they own CN¥1.0b worth of shares in the CN¥1.7b company. That's quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 28% stake in the company, and hence can't easily be ignored. 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

It seems that Private Companies own 3.3%, of the Beijing ZEHO Waterfront Ecological Environment Treatment stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Beijing ZEHO Waterfront Ecological Environment Treatment better, we need to consider many other factors. Be aware that Beijing ZEHO Waterfront Ecological Environment Treatment is showing 1 warning sign in our investment analysis , you should know about...

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.