Insiders are the top stockholders in Hunan Dajiaweikang Pharmaceutical Industry Co.,Ltd (SZSE:301126), and the recent 10% drop might have disappointed them

Key Insights

• Insiders appear to have a vested interest in Hunan Dajiaweikang Pharmaceutical IndustryLtd's growth, as seen by their sizeable ownership
• A total of 4 investors have a majority stake in the company with 52% ownership
• Institutional ownership in Hunan Dajiaweikang Pharmaceutical IndustryLtd is 11%

Every investor in Hunan Dajiaweikang Pharmaceutical Industry Co.,Ltd (SZSE:301126) should be aware of the most powerful shareholder groups. With 44% 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 as a group endured the highest losses after market cap fell by CN¥259m.

Let's delve deeper into each type of owner of Hunan Dajiaweikang Pharmaceutical IndustryLtd, beginning with the chart below.

Check out our latest analysis for Hunan Dajiaweikang Pharmaceutical IndustryLtd

What Does The Institutional Ownership Tell Us About Hunan Dajiaweikang Pharmaceutical IndustryLtd?

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.

Hunan Dajiaweikang Pharmaceutical IndustryLtd 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. 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 Hunan Dajiaweikang Pharmaceutical IndustryLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Hunan Dajiaweikang Pharmaceutical IndustryLtd is not owned by hedge funds. Yiqing Wang is currently the largest shareholder, with 34% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 9.4% and 4.8%, of the shares outstanding, respectively.

On looking further, we found that 52% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Hunan Dajiaweikang Pharmaceutical IndustryLtd

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.

Our information suggests that insiders maintain a significant holding in Hunan Dajiaweikang Pharmaceutical Industry Co.,Ltd. Insiders own CN¥997m worth of shares in the CN¥2.3b company. 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 40% stake in Hunan Dajiaweikang Pharmaceutical IndustryLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 4.8%, 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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Hunan Dajiaweikang Pharmaceutical IndustryLtd , and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.