While individual investors own 38% of Shanxi Lu'an Environmental Energy Development Co., Ltd. (SHSE:601699), private companies are its largest shareholders with 52% ownership

Key Insights

• The considerable ownership by private companies in Shanxi Lu'an Environmental Energy Development indicates that they collectively have a greater say in management and business strategy
• Shanxi State-owned Capital Operation Co., Ltd. owns 51% of the company
• Institutional ownership in Shanxi Lu'an Environmental Energy Development is 10%

To get a sense of who is truly in control of Shanxi Lu'an Environmental Energy Development Co., Ltd. (SHSE:601699), it is important to understand the ownership structure of the business. With 52% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And individual investors on the other hand have a 38% ownership in the company.

Let's take a closer look to see what the different types of shareholders can tell us about Shanxi Lu'an Environmental Energy Development.

View our latest analysis for Shanxi Lu'an Environmental Energy Development

What Does The Institutional Ownership Tell Us About Shanxi Lu'an Environmental Energy 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.

As you can see, institutional investors have a fair amount of stake in Shanxi Lu'an Environmental Energy Development. 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. 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 Shanxi Lu'an Environmental Energy Development, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Shanxi Lu'an Environmental Energy Development. Looking at our data, we can see that the largest shareholder is Shanxi State-owned Capital Operation Co., Ltd. with 51% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Meanwhile, the second and third largest shareholders, hold 1.5% and 1.1%, of the shares outstanding, respectively.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Shanxi Lu'an Environmental Energy 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.

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 data cannot confirm that board members are holding shares personally. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO.

General Public Ownership

The general public, who are usually individual investors, hold a 38% stake in Shanxi Lu'an Environmental Energy Development. 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

Our data indicates that Private Companies hold 52%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Shanxi Lu'an Environmental Energy Development better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Shanxi Lu'an Environmental Energy Development (at least 1 which can't be ignored) , and understanding them should be part of your investment process.

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.

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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.