Shandong Minhe Animal Husbandry Co., Ltd.'s (SZSE:002234) last week's 11% decline must have disappointed retail investors who have a significant stake

Key Insights

• Shandong Minhe Animal Husbandry's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 25 shareholders own 46% of the company
• Insiders own 40% of Shandong Minhe Animal Husbandry

A look at the shareholders of Shandong Minhe Animal Husbandry Co., Ltd. (SZSE:002234) can tell us which group is most powerful. The group holding the most number of shares in the company, around 54% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While insiders who own 40% came under pressure after market cap dropped to CN¥2.8b last week,retail investors took the most losses.

Let's delve deeper into each type of owner of Shandong Minhe Animal Husbandry, beginning with the chart below.

Check out our latest analysis for Shandong Minhe Animal Husbandry

What Does The Institutional Ownership Tell Us About Shandong Minhe Animal 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.

Shandong Minhe Animal Husbandry 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 Shandong Minhe Animal 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 Shandong Minhe Animal Husbandry. The company's CEO Xianxian Sun is the largest shareholder with 24% of shares outstanding. In comparison, the second and third largest shareholders hold about 14% and 2.3% of the stock.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Shandong Minhe Animal Husbandry

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. 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.

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.

Our information suggests that insiders maintain a significant holding in Shandong Minhe Animal Husbandry Co., Ltd.. Insiders have a CN¥1.1b stake in this CN¥2.8b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 54% of Shandong Minhe Animal Husbandry shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shandong Minhe Animal Husbandry better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

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