Qinghai Huzhu TianYouDe Highland Barley Spirit Co., Ltd.'s (SZSE:002646) stock price dropped 13% last week; individual investors would not be happy

Key Insights

• Significant control over Qinghai Huzhu TianYouDe Highland Barley Spirit by individual investors implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 7 shareholders
• 13% of Qinghai Huzhu TianYouDe Highland Barley Spirit is held by Institutions

Every investor in Qinghai Huzhu TianYouDe Highland Barley Spirit Co., Ltd. (SZSE:002646) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 46% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, individual investors endured the biggest losses as the stock fell by 13%.

Let's take a closer look to see what the different types of shareholders can tell us about Qinghai Huzhu TianYouDe Highland Barley Spirit.

See our latest analysis for Qinghai Huzhu TianYouDe Highland Barley Spirit

What Does The Institutional Ownership Tell Us About Qinghai Huzhu TianYouDe Highland Barley Spirit?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Qinghai Huzhu TianYouDe Highland Barley Spirit already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Qinghai Huzhu TianYouDe Highland Barley Spirit's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Qinghai Huzhu TianYouDe Highland Barley Spirit. The company's largest shareholder is Qinghai Huashi Technology Investment Management Co., Ltd, with ownership of 41%. China Merchants Fund Management Company Ltd. is the second largest shareholder owning 4.8% of common stock, and Beijing Tingquan Private Fund Management Co., Ltd. holds about 1.1% of the company stock.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. 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 Qinghai Huzhu TianYouDe Highland Barley Spirit

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.

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 data suggests that insiders own under 1% of Qinghai Huzhu TianYouDe Highland Barley Spirit Co., Ltd. in their own names. However, it's possible that insiders might have an indirect interest through a more complex structure. It seems the board members have no more than CN¥8.6m worth of shares in the CN¥4.8b company. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

With a 46% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Qinghai Huzhu TianYouDe Highland Barley Spirit. 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 41%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 1 warning sign for Qinghai Huzhu TianYouDe Highland Barley Spirit that you should be aware of before investing here.

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.

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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.