Xiwang Foodstuffs Co.,Ltd.'s (SZSE:000639) market cap surged CN¥302m last week, private companies who have a lot riding on the company were rewarded

Key Insights

• Significant control over Xiwang FoodstuffsLtd by private companies implies that the general public has more power to influence management and governance-related decisions
• A total of 3 investors have a majority stake in the company with 51% ownership
• 14% of Xiwang FoodstuffsLtd is held by Institutions

Every investor in Xiwang Foodstuffs Co.,Ltd. (SZSE:000639) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 51% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private companies collectively scored the highest last week as the company hit CN¥3.2b market cap following a 10% gain in the stock.

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

View our latest analysis for Xiwang FoodstuffsLtd

What Does The Institutional Ownership Tell Us About Xiwang FoodstuffsLtd?

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.

Xiwang FoodstuffsLtd 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 Xiwang FoodstuffsLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Xiwang FoodstuffsLtd is not owned by hedge funds. Xiwang Group Company Limited is currently the company's largest shareholder with 29% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 17% and 5.0%, of the shares outstanding, respectively.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Xiwang FoodstuffsLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

We can report that insiders do own shares in Xiwang Foodstuffs Co.,Ltd.. It has a market capitalization of just CN¥3.2b, and insiders have CN¥77m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Xiwang FoodstuffsLtd. 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 Company Ownership

It seems that Private Companies own 51%, of the Xiwang FoodstuffsLtd stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Xiwang FoodstuffsLtd better, we need to consider many other factors. Be aware that Xiwang FoodstuffsLtd is showing 2 warning signs in our investment analysis , and 1 of those is a bit concerning...

Of course this may not be the best stock to buy. So take a peek at this free 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.