Individual investors invested in CareRay Digital Medical Technology Co., Ltd. (SHSE:688607) copped the brunt of last week's CN¥149m market cap decline

Key Insights

• The considerable ownership by individual investors in CareRay Digital Medical Technology indicates that they collectively have a greater say in management and business strategy
• The top 10 shareholders own 51% of the company
• Insider ownership in CareRay Digital Medical Technology is 19%

Every investor in CareRay Digital Medical Technology Co., Ltd. (SHSE:688607) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 38% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While the holdings of individual investors took a hit after last week’s 11% price drop, insiders with their 19% also suffered.

Let's delve deeper into each type of owner of CareRay Digital Medical Technology, beginning with the chart below.

See our latest analysis for CareRay Digital Medical Technology

What Does The Institutional Ownership Tell Us About CareRay Digital Medical Technology?

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.

CareRay Digital Medical Technology 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 CareRay Digital Medical Technology'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 CareRay Digital Medical Technology. With a 15% stake, CEO Jianqiang Liu is the largest shareholder. With 10% and 7.3% of the shares outstanding respectively, China-Singapore Suzhou Industrial Park Ventures Co., Ltd. and Matrix Future Limited are the second and third largest shareholders.

We also observed that the top 10 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 CareRay Digital Medical Technology

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

It seems insiders own a significant proportion of CareRay Digital Medical Technology Co., Ltd.. Insiders have a CN¥238m stake in this CN¥1.2b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 38% ownership, the general public, mostly comprising of individual investors, have some degree of sway over CareRay Digital Medical Technology. 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 Equity Ownership

With a stake of 10%, private equity firms could influence the CareRay Digital Medical Technology board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

Our data indicates that Private Companies hold 14%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.