Institutional owners may take dramatic actions as Qingdao NovelBeam Technology Co.,Ltd.'s (SHSE:688677) recent 7.0% drop adds to one-year losses

Key Insights

• Significantly high institutional ownership implies Qingdao NovelBeam TechnologyLtd's stock price is sensitive to their trading actions
• The top 6 shareholders own 51% of the company
• 13% of Qingdao NovelBeam TechnologyLtd is held by insiders

Every investor in Qingdao NovelBeam Technology Co.,Ltd. (SHSE:688677) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 31% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And so it follows that institutional investors was the group most impacted after the company's market cap fell to CN¥5.1b last week after a 7.0% drop in the share price. This set of investors may especially be concerned about the current loss, which adds to a one-year loss of 36% for shareholders. Also referred to as "smart money", institutions have a lot of sway over how a stock's price moves. Hence, if weakness in Qingdao NovelBeam TechnologyLtd's share price continues, institutional investors may feel compelled to sell the stock, which might not be ideal for individual investors.

Let's delve deeper into each type of owner of Qingdao NovelBeam TechnologyLtd, beginning with the chart below.

View our latest analysis for Qingdao NovelBeam TechnologyLtd

What Does The Institutional Ownership Tell Us About Qingdao NovelBeam TechnologyLtd?

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 Qingdao NovelBeam TechnologyLtd. 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. 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 Qingdao NovelBeam TechnologyLtd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Qingdao NovelBeam TechnologyLtd. Qingdao Puaoda Enterprise Management Service Co., Ltd. is currently the company's largest shareholder with 13% of shares outstanding. With 12% and 12% of the shares outstanding respectively, Anmin Zheng and Foreal Spectrum Inc. are the second and third largest shareholders.

We did some more digging and found that 6 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Qingdao NovelBeam TechnologyLtd

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. 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 most recent data indicates that insiders own a reasonable proportion of Qingdao NovelBeam Technology Co.,Ltd.. Insiders own CN¥649m worth of shares in the CN¥5.1b company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 23% stake in Qingdao NovelBeam TechnologyLtd. 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

It seems that Private Companies own 25%, of the Qingdao NovelBeam TechnologyLtd stock. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Qingdao NovelBeam TechnologyLtd better, we need to consider many other factors. For instance, we've identified 1 warning sign for Qingdao NovelBeam TechnologyLtd that you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.