Institutions along with retail investors who hold considerable shares inB-SOFT Co.,Ltd. (SZSE:300451) come under pressure; lose 13% of holdings value

Key Insights

• Significant control over B-SOFTLtd by retail investors implies that the general public has more power to influence management and governance-related decisions
• A total of 14 investors have a majority stake in the company with 51% ownership
• Insider ownership in B-SOFTLtd is 16%

A look at the shareholders of B-SOFT Co.,Ltd. (SZSE:300451) can tell us which group is most powerful. The group holding the most number of shares in the company, around 42% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 13% decrease in the stock price last week, retail investors suffered the most losses, but institutions who own 27% stock also took a hit.

Let's take a closer look to see what the different types of shareholders can tell us about B-SOFTLtd.

See our latest analysis for B-SOFTLtd

What Does The Institutional Ownership Tell Us About B-SOFTLtd?

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.

B-SOFTLtd 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of B-SOFTLtd, (below). Of course, keep in mind that there are other factors to consider, too.

B-SOFTLtd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Hang Ge with 14% of shares outstanding. Koninklijke Philips N.V. is the second largest shareholder owning 10% of common stock, and E Fund Management Co., Ltd. holds about 6.4% of the company stock.

After doing some more digging, we found that the top 14 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

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 B-SOFTLtd

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.

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 information suggests that insiders maintain a significant holding in B-SOFT Co.,Ltd.. Insiders have a CN¥870m stake in this CN¥5.3b 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

With a 42% ownership, the general public, mostly comprising of individual investors, have some degree of sway over B-SOFTLtd. 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 3.4%, of the B-SOFTLtd 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.

Public Company Ownership

Public companies currently own 12% of B-SOFTLtd stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand B-SOFTLtd better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with B-SOFTLtd .

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.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com