Guangdong Golden Dragon Development Inc.'s (SZSE:000712) market cap dropped CN¥448m last week; Individual investors bore the brunt

Key Insights

• The considerable ownership by individual investors in Guangdong Golden Dragon Development indicates that they collectively have a greater say in management and business strategy
• A total of 3 investors have a majority stake in the company with 50% ownership
• 22% of Guangdong Golden Dragon Development is held by insiders

Every investor in Guangdong Golden Dragon Development Inc. (SZSE:000712) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 46% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 3.8% decline in share price, individual investors suffered the most losses.

Let's delve deeper into each type of owner of Guangdong Golden Dragon Development, beginning with the chart below.

Check out our latest analysis for Guangdong Golden Dragon Development

What Does The Institutional Ownership Tell Us About Guangdong Golden Dragon Development?

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.

Since institutions own only a small portion of Guangdong Golden Dragon Development, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. So if the company itself can improve over time, we may well see more institutional buyers in the future. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

Guangdong Golden Dragon Development is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Dongguan Hongshun Industrial Development Co., Ltd. with 28% of shares outstanding. With 15% and 7.4% of the shares outstanding respectively, Fenglian Zhu and Zhimao Yang are the second and third largest shareholders.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Guangdong Golden Dragon Development

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems insiders own a significant proportion of Guangdong Golden Dragon Development Inc.. It has a market capitalization of just CN¥11b, and insiders have CN¥2.5b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 46% stake in Guangdong Golden Dragon Development. 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

We can see that Private Companies own 28%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Guangdong Golden Dragon Development better, we need to consider many other factors. For instance, we've identified 1 warning sign for Guangdong Golden Dragon Development that you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.