Following a 13% decline over last year, recent gains may please Guangdong Guanghong Holdings Co.,Ltd. (SZSE:000529) institutional owners

Key Insights

• Significantly high institutional ownership implies Guangdong Guanghong HoldingsLtd's stock price is sensitive to their trading actions
• Guangdong Guanghong Asset Management Co. Ltd. owns 55% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Guangdong Guanghong Holdings Co.,Ltd. (SZSE:000529) should be aware of the most powerful shareholder groups. With 59% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Last week's CN¥403m market cap gain would probably be appreciated by institutional investors, especially after a year of 13% losses.

In the chart below, we zoom in on the different ownership groups of Guangdong Guanghong HoldingsLtd.

See our latest analysis for Guangdong Guanghong HoldingsLtd

What Does The Institutional Ownership Tell Us About Guangdong Guanghong HoldingsLtd?

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.

We can see that Guangdong Guanghong HoldingsLtd does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Guangdong Guanghong HoldingsLtd's earnings history below. Of course, the future is what really matters.

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Guangdong Guanghong HoldingsLtd is not owned by hedge funds. Guangdong Guanghong Asset Management Co. Ltd. is currently the largest shareholder, with 55% of shares outstanding. This implies that they have majority interest control of the future of the company. In comparison, the second and third largest shareholders hold about 1.0% and 0.4% of the stock.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Guangdong Guanghong HoldingsLtd

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.

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 note our data does not show any board members holding shares, personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.

General Public Ownership

The general public-- including retail investors -- own 40% 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 3 warning signs for Guangdong Guanghong HoldingsLtd (1 is significant) that you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.