Ligao Foods Co.,Ltd. (SZSE:300973) insiders, who hold 55% of the firm would be disappointed by the recent pullback

Key Insights

• Ligao FoodsLtd's significant insider ownership suggests inherent interests in company's expansion
• 50% of the business is held by the top 5 shareholders
• Institutional ownership in Ligao FoodsLtd is 14%

A look at the shareholders of Ligao Foods Co.,Ltd. (SZSE:300973) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 55% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to CN¥6.0b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

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

View our latest analysis for Ligao FoodsLtd

What Does The Institutional Ownership Tell Us About Ligao FoodsLtd?

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.

As you can see, institutional investors have a fair amount of stake in Ligao FoodsLtd. 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 Ligao FoodsLtd'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 Ligao FoodsLtd. The company's largest shareholder is Yuhui Peng, with ownership of 19%. Songtao Zhao is the second largest shareholder owning 10% of common stock, and Baokun Bai holds about 9.8% of the company stock. Baokun Bai, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. In addition, we found that Hejun Chen, the CEO has 6.5% of the shares allocated to their name.

Our research also brought to light the fact that roughly 50% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Ligao FoodsLtd

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.

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.

Our information suggests that insiders own more than half of Ligao Foods Co.,Ltd.. This gives them effective control of the company. That means they own CN¥3.3b worth of shares in the CN¥6.0b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Ligao FoodsLtd. 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

We can see that Private Companies own 6.1%, of the shares on issue. 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 Ligao FoodsLtd better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Ligao FoodsLtd you should be aware of, and 1 of them makes us a bit uncomfortable.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.