Recent 13% pullback would hurt HiVi Acoustics Technology Co., Ltd (SZSE:002888) insiders

Key Insights

• Insiders appear to have a vested interest in HiVi Acoustics Technology's growth, as seen by their sizeable ownership
• The largest shareholder of the company is Hongbo Yao with a 62% stake
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in HiVi Acoustics Technology Co., Ltd (SZSE:002888) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 66% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders as a group endured the highest losses after market cap fell by CN¥247m.

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

See our latest analysis for HiVi Acoustics Technology

What Does The Institutional Ownership Tell Us About HiVi Acoustics Technology?

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 HiVi Acoustics Technology. 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 HiVi Acoustics Technology, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in HiVi Acoustics Technology. Looking at our data, we can see that the largest shareholder is Hongbo Yao with 62% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. HUI FANG CHEN is the second largest shareholder owning 3.6% of common stock, and Shanghai Eureka Investment Management Partnership Enterprise (Limited Partnership) holds about 0.7% of the company stock.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of HiVi Acoustics Technology

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.

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 most recent data indicates that insiders own the majority of HiVi Acoustics Technology Co., Ltd. This means they can collectively make decisions for the company. That means they own CN¥1.1b worth of shares in the CN¥1.6b 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

With a 28% ownership, the general public, mostly comprising of individual investors, have some degree of sway over HiVi Acoustics Technology. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 2 warning signs we've spotted with HiVi Acoustics Technology (including 1 which is a bit unpleasant) .

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.