Retail investors are Beijing Compass Technology Development Co., Ltd.'s (SZSE:300803) biggest owners and were hit after market cap dropped CN¥1.9b

Key Insights

• The considerable ownership by retail investors in Beijing Compass Technology Development indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 13 shareholders
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

A look at the shareholders of Beijing Compass Technology Development Co., Ltd. (SZSE:300803) can tell us which group is most powerful. The group holding the most number of shares in the company, around 47% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, retail investors as a group endured the highest losses last week after market cap fell by CN¥1.9b.

In the chart below, we zoom in on the different ownership groups of Beijing Compass Technology Development.

View our latest analysis for Beijing Compass Technology Development

What Does The Institutional Ownership Tell Us About Beijing Compass Technology Development?

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 Beijing Compass Technology Development does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Beijing Compass Technology Development's historic earnings and revenue below, but keep in mind there's always more to the story.

Beijing Compass Technology Development is not owned by hedge funds. The company's largest shareholder is Guangzhou Zhanxin Communication Technology Co., Ltd., with ownership of 40%. With 1.7% and 1.3% of the shares outstanding respectively, E Fund Management Co., Ltd. and Kuanyu Chen are the second and third largest shareholders.

After doing some more digging, we found that the top 13 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 Beijing Compass Technology Development

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.

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.

We can report that insiders do own shares in Beijing Compass Technology Development Co., Ltd.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around CN¥1.4b worth of shares (at current prices). It is good to see this level of investment by insiders. 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 47% stake in Beijing Compass Technology 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 41%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the 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. To that end, you should learn about the 2 warning signs we've spotted with Beijing Compass Technology Development (including 1 which is potentially serious) .

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.