Institutional owners may consider drastic measures as Anjoy Foods Group Co., Ltd.'s (SHSE:603345) recent CN¥1.8b drop adds to long-term losses

Key Insights

• Given the large stake in the stock by institutions, Anjoy Foods Group's stock price might be vulnerable to their trading decisions
• The top 8 shareholders own 52% of the company
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Anjoy Foods Group Co., Ltd. (SHSE:603345), then you'll have to look at the makeup of its share registry. With 42% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And institutional investors saw their holdings value drop by 6.5% last week. This set of investors may especially be concerned about the current loss, which adds to a one-year loss of 42% for shareholders. Often called “market movers", institutions wield significant power in influencing the price dynamics of any stock. As a result, if the downtrend continues, institutions may face pressures to sell Anjoy Foods Group, which might have negative implications on individual investors.

Let's take a closer look to see what the different types of shareholders can tell us about Anjoy Foods Group.

View our latest analysis for Anjoy Foods Group

What Does The Institutional Ownership Tell Us About Anjoy Foods Group?

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 Anjoy Foods Group. 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 Anjoy Foods Group's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Anjoy Foods Group. The company's largest shareholder is Fujian Guoli Minsheng Technology Development Co., Ltd., with ownership of 25%. In comparison, the second and third largest shareholders hold about 12% and 4.2% of the stock. Ming Ming Liu, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board. In addition, we found that Qing Miao Zhang, the CEO has 1.8% of the shares allocated to their name.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Anjoy Foods Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our most recent data indicates that insiders own some shares in Anjoy Foods Group Co., Ltd.. The insiders have a meaningful stake worth CN¥1.9b. Most would see this as a real positive. If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 26% stake in Anjoy Foods Group. 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 Equity Ownership

Private equity firms hold a 25% stake in Anjoy Foods Group. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

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. For example, we've discovered 1 warning sign for Anjoy Foods Group that you should be aware of before investing here.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.