After losing 33% in the past year, Guangdong Wenke Green Technology Corp.,Ltd. (SZSE:002775) institutional owners must be relieved by the recent gain

Key Insights

• Given the large stake in the stock by institutions, Guangdong Wenke Green TechnologyLtd's stock price might be vulnerable to their trading decisions
• 51% of the business is held by the top 2 shareholders
• 17% of Guangdong Wenke Green TechnologyLtd is held by insiders

Every investor in Guangdong Wenke Green Technology Corp.,Ltd. (SZSE:002775) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 41% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Last week's CN¥211m market cap gain would probably be appreciated by institutional investors, especially after a year of 33% losses.

Let's delve deeper into each type of owner of Guangdong Wenke Green TechnologyLtd, beginning with the chart below.

View our latest analysis for Guangdong Wenke Green TechnologyLtd

What Does The Institutional Ownership Tell Us About Guangdong Wenke Green TechnologyLtd?

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 Guangdong Wenke Green TechnologyLtd. 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. 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 Guangdong Wenke Green TechnologyLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Guangdong Wenke Green TechnologyLtd. Foshan Construction Development Group Co.,Ltd. is currently the company's largest shareholder with 37% of shares outstanding. In comparison, the second and third largest shareholders hold about 14% and 3.2% of the stock. Cong Wen Li, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Guangdong Wenke Green TechnologyLtd

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

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.

Our most recent data indicates that insiders own a reasonable proportion of Guangdong Wenke Green Technology Corp.,Ltd.. Insiders own CN¥259m worth of shares in the CN¥1.5b company. 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 35% stake in Guangdong Wenke Green TechnologyLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 6.4%, of the company's shares. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Guangdong Wenke Green TechnologyLtd better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Guangdong Wenke Green TechnologyLtd (of which 2 make us uncomfortable!) 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.