Insiders were the biggest winners as Shenzhen Strongteam Decoration Engineering Co., Ltd.'s (SZSE:002989) market cap grew by CN¥303m last week

Key Insights

• Significant insider control over Shenzhen Strongteam Decoration Engineering implies vested interests in company growth
• A total of 2 investors have a majority stake in the company with 62% ownership
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Shenzhen Strongteam Decoration Engineering Co., Ltd. (SZSE:002989) should be aware of the most powerful shareholder groups. With 63% stake, individual insiders possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders were the biggest beneficiaries of last week’s 11% gain.

Let's delve deeper into each type of owner of Shenzhen Strongteam Decoration Engineering, beginning with the chart below.

Check out our latest analysis for Shenzhen Strongteam Decoration Engineering

What Does The Institutional Ownership Tell Us About Shenzhen Strongteam Decoration Engineering?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

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

We note that hedge funds don't have a meaningful investment in Shenzhen Strongteam Decoration Engineering. Our data shows that Rongjian Qiao is the largest shareholder with 37% of shares outstanding. For context, the second largest shareholder holds about 25% of the shares outstanding, followed by an ownership of 4.1% by the third-largest shareholder. An Zhang, 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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Shenzhen Strongteam Decoration Engineering

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 information suggests that insiders own more than half of Shenzhen Strongteam Decoration Engineering Co., Ltd.. This gives them effective control of the company. So they have a CN¥2.0b stake in this CN¥3.2b business. 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 23% stake in Shenzhen Strongteam Decoration Engineering. 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 8.7%, of the company's shares. 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:

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 - Shenzhen Strongteam Decoration Engineering has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com