Hunan Mendale Hometextile Co.,Ltd's (SZSE:002397) market cap rose CN¥262m last week; individual investors who hold 48% profited and so did insiders

Key Insights

• The considerable ownership by individual investors in Hunan Mendale HometextileLtd indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 12 shareholders
• Insiders own 35% of Hunan Mendale HometextileLtd

Every investor in Hunan Mendale Hometextile Co.,Ltd (SZSE:002397) should be aware of the most powerful shareholder groups. With 48% stake, individual investors 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).

Individual investors gained the most after market cap touched CN¥2.0b last week, while insiders who own 35% also benefitted.

Let's delve deeper into each type of owner of Hunan Mendale HometextileLtd, beginning with the chart below.

See our latest analysis for Hunan Mendale HometextileLtd

What Does The Institutional Ownership Tell Us About Hunan Mendale HometextileLtd?

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 Hunan Mendale HometextileLtd does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Hunan Mendale HometextileLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hunan Mendale HometextileLtd is not owned by hedge funds. The company's largest shareholder is Tian Wu Jiang, with ownership of 14%. In comparison, the second and third largest shareholders hold about 11% and 10% of the stock.

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 Hunan Mendale HometextileLtd

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.

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.

Our information suggests that insiders maintain a significant holding in Hunan Mendale Hometextile Co.,Ltd. Insiders have a CN¥690m stake in this CN¥2.0b business. 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

With a 48% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Hunan Mendale HometextileLtd. 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 10%, 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:

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. Take risks for example - Hunan Mendale HometextileLtd has 2 warning signs (and 1 which doesn't sit too well with us) we think 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.