Leshan Giantstar Farming&Husbandry Corporation Limited (SHSE:603477) surges 3.7%; private companies who own 48% shares profited along with institutions

Key Insights

• Leshan Giantstar Farming&Husbandry's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 52% of the business is held by the top 3 shareholders
• Institutions own 27% of Leshan Giantstar Farming&Husbandry

If you want to know who really controls Leshan Giantstar Farming&Husbandry Corporation Limited (SHSE:603477), then you'll have to look at the makeup of its share registry. With 48% stake, private companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 3.7% increase in the stock price last week, private companies profited the most, but institutions who own 27% stock also stood to gain from the increase.

In the chart below, we zoom in on the different ownership groups of Leshan Giantstar Farming&Husbandry.

View our latest analysis for Leshan Giantstar Farming&Husbandry

What Does The Institutional Ownership Tell Us About Leshan Giantstar Farming&Husbandry?

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 Leshan Giantstar Farming&Husbandry. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Leshan Giantstar Farming&Husbandry'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 Leshan Giantstar Farming&Husbandry. Sichuan Giant Star Enterprise Group Co., Ltd. is currently the largest shareholder, with 29% of shares outstanding. For context, the second largest shareholder holds about 18% of the shares outstanding, followed by an ownership of 4.3% by the third-largest shareholder.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.

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 Leshan Giantstar Farming&Husbandry

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.

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.

We can report that insiders do own shares in Leshan Giantstar Farming&Husbandry Corporation Limited. The insiders have a meaningful stake worth CN¥515m. Most would see this as a real positive. Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 21% stake in Leshan Giantstar Farming&Husbandry. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

It seems that Private Companies own 48%, of the Leshan Giantstar Farming&Husbandry 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Leshan Giantstar Farming&Husbandry you should know about.

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.

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