Ningbo Daye Garden Machinery Co.,Ltd.'s (SZSE:300879) most bullish insider is CEO Xiaobo Ye, and their holdings value went up by 11% last week

Key Insights

• Significant insider control over Ningbo Daye Garden MachineryLtd implies vested interests in company growth
• Xiaobo Ye owns 51% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Ningbo Daye Garden Machinery Co.,Ltd. (SZSE:300879) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 51% ownership. 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.

In the chart below, we zoom in on the different ownership groups of Ningbo Daye Garden MachineryLtd.

See our latest analysis for Ningbo Daye Garden MachineryLtd

What Does The Institutional Ownership Tell Us About Ningbo Daye Garden MachineryLtd?

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.

Institutions have a very small stake in Ningbo Daye Garden MachineryLtd. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Ningbo Daye Garden MachineryLtd is not owned by hedge funds. The company's CEO Xiaobo Ye is the largest shareholder with 51% of shares outstanding. This implies that they possess majority interests and have significant control over the company. Investors usually consider it a good sign when the company leadership has such a significant stake, as this is widely perceived to increase the chance that the management will act in the best interests of the company. For context, the second largest shareholder holds about 4.7% of the shares outstanding, followed by an ownership of 0.8% by the third-largest shareholder.

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 Ningbo Daye Garden MachineryLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

It seems that insiders own more than half the Ningbo Daye Garden Machinery Co.,Ltd. stock. This gives them a lot of power. Given it has a market cap of CN¥3.1b, that means they have CN¥1.6b worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

With a 39% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Ningbo Daye Garden MachineryLtd. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 5.1%, of the Ningbo Daye Garden MachineryLtd 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:

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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Ningbo Daye Garden MachineryLtd (at least 2 which are significant) , and understanding them should be part of your investment process.

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.

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

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.