Toly Bread Co.,Ltd. (SHSE:603866) Senior Key Executive Xue Qun Wu, the company's largest shareholder sees 7.8%reduction in holdings value

Key Insights

• Insiders appear to have a vested interest in Toly BreadLtd's growth, as seen by their sizeable ownership
• The top 2 shareholders own 51% of the company
• Institutional ownership in Toly BreadLtd is 11%

Every investor in Toly Bread Co.,Ltd. (SHSE:603866) should be aware of the most powerful shareholder groups. With 63% stake, individual insiders 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 following last week's 7.8% decline in share price, insiders suffered the most losses.

Let's delve deeper into each type of owner of Toly BreadLtd, beginning with the chart below.

Check out our latest analysis for Toly BreadLtd

What Does The Institutional Ownership Tell Us About Toly BreadLtd?

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.

Toly BreadLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Toly BreadLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Toly BreadLtd is not owned by hedge funds. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Toly BreadLtd's case, its Senior Key Executive, Xue Qun Wu, is the largest shareholder, holding 37% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 14% and 9.5%, of the shares outstanding, respectively. Interestingly, the second-largest shareholder, Liang Xue Wu is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Toly BreadLtd

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.

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 the majority of Toly Bread Co.,Ltd.. This means they can collectively make decisions for the company. That means insiders have a very meaningful CN¥5.3b stake in this CN¥8.4b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public-- including retail investors -- own 26% stake in the company, and hence can't easily be ignored. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Toly BreadLtd better, we need to consider many other factors. For example, we've discovered 1 warning sign for Toly BreadLtd that you should be aware of before investing here.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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