Painful week for individual investors invested in Tangrenshen Group Co., Ltd (SZSE:002567) after 5.4% drop, institutions also suffered losses

Key Insights

• Tangrenshen Group's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 25 investors have a majority stake in the company with 48% ownership
• 39% of Tangrenshen Group is held by Institutions

A look at the shareholders of Tangrenshen Group Co., Ltd (SZSE:002567) can tell us which group is most powerful. We can see that individual investors own the lion's share in the company with 41% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions, who own 39% shares weren’t spared from last week’s CN¥497m market cap drop, individual investors as a group suffered the maximum losses

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

View our latest analysis for Tangrenshen Group

What Does The Institutional Ownership Tell Us About Tangrenshen Group?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

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

Tangrenshen Group is not owned by hedge funds. Hunan Tangrenshen Holding Investment Co., Ltd. is currently the company's largest shareholder with 11% of shares outstanding. Tai Sang Feeds Co., Ltd. is the second largest shareholder owning 6.9% of common stock, and Hunan Chasing Asset Management Co.,Ltd. holds about 3.1% of the company stock.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Tangrenshen Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 see that insiders own shares in Tangrenshen Group Co., Ltd. The insiders have a meaningful stake worth CN¥110m. Most would see this as a real positive. Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

With a 41% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Tangrenshen Group. 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

Our data indicates that Private Companies hold 18%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Tangrenshen Group better, we need to consider many other factors. Take risks for example - Tangrenshen Group has 1 warning sign we think you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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