Insiders the biggest winners as Suzhou Iron Technology CO.,LTD's (SHSE:688329) market cap rises to CN¥1.2b

Key Insights

• Suzhou Iron TechnologyLTD's significant insider ownership suggests inherent interests in company's expansion
• A total of 7 investors have a majority stake in the company with 51% ownership
• Institutional ownership in Suzhou Iron TechnologyLTD is 17%

A look at the shareholders of Suzhou Iron Technology CO.,LTD (SHSE:688329) can tell us which group is most powerful. With 45% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit CN¥1.2b market cap following a 27% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Suzhou Iron TechnologyLTD.

View our latest analysis for Suzhou Iron TechnologyLTD

What Does The Institutional Ownership Tell Us About Suzhou Iron TechnologyLTD?

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.

Suzhou Iron TechnologyLTD 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. 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 Suzhou Iron TechnologyLTD's earnings history below. Of course, the future is what really matters.

Suzhou Iron TechnologyLTD is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Yinhua Zhang with 31% of shares outstanding. Li Xu is the second largest shareholder owning 11% of common stock, and Qingnan Wen holds about 2.4% of the company stock. Li Xu, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

We did some more digging and found that 7 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Suzhou Iron TechnologyLTD

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 maintain a significant holding in Suzhou Iron Technology CO.,LTD. Insiders have a CN¥539m stake in this CN¥1.2b 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, who are usually individual investors, hold a 38% stake in Suzhou Iron TechnologyLTD. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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. Take risks for example - Suzhou Iron TechnologyLTD has 2 warning signs (and 1 which shouldn't be ignored) we think you should know about.

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.