Insiders with their considerable ownership were the key benefactors as Shandong Huifa Foodstuff Co.,Ltd. (SHSE:603536) touches CN¥4.2b market cap

Key Insights

• Shandong Huifa FoodstuffLtd's significant insider ownership suggests inherent interests in company's expansion
• 57% of the business is held by the top 2 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 Shandong Huifa Foodstuff Co.,Ltd. (SHSE:603536) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 35% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders were the biggest beneficiaries of last week’s 61% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Shandong Huifa FoodstuffLtd.

View our latest analysis for Shandong Huifa FoodstuffLtd

What Does The Institutional Ownership Tell Us About Shandong Huifa FoodstuffLtd?

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.

As you can see, institutional investors have a fair amount of stake in Shandong Huifa FoodstuffLtd. 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. 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 Shandong Huifa FoodstuffLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Shandong Huifa FoodstuffLtd. Shandong Huifa Investment Co., Ltd. is currently the company's largest shareholder with 29% of shares outstanding. Zeng Yu Hui is the second largest shareholder owning 28% of common stock, and Hong Yang holds about 4.2% of the company stock.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 57% stake.

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. 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 Shandong Huifa FoodstuffLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Our information suggests that insiders maintain a significant holding in Shandong Huifa Foodstuff Co.,Ltd.. Insiders own CN¥1.5b worth of shares in the CN¥4.2b company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 28% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shandong Huifa FoodstuffLtd. 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

We can see that Private Companies own 31%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Shandong Huifa FoodstuffLtd better, we need to consider many other factors. For instance, we've identified 2 warning signs for Shandong Huifa FoodstuffLtd (1 doesn't sit too well with us) that you should be aware of.

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.