Jiangsu Canopus Wisdom Medical Technology Co.,Ltd.'s (SZSE:301290) market cap dropped CN¥226m last week; Individual investors bore the brunt

Key Insights

• The considerable ownership by individual investors in Jiangsu Canopus Wisdom Medical TechnologyLtd indicates that they collectively have a greater say in management and business strategy
• 51% of the business is held by the top 11 shareholders
• Insiders own 33% of Jiangsu Canopus Wisdom Medical TechnologyLtd

To get a sense of who is truly in control of Jiangsu Canopus Wisdom Medical Technology Co.,Ltd. (SZSE:301290), it is important to understand the ownership structure of the business. With 44% stake, individual investors possess the maximum shares in the company. 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 10% price drop, insiders with their 33% also suffered.

Let's delve deeper into each type of owner of Jiangsu Canopus Wisdom Medical TechnologyLtd, beginning with the chart below.

View our latest analysis for Jiangsu Canopus Wisdom Medical TechnologyLtd

What Does The Institutional Ownership Tell Us About Jiangsu Canopus Wisdom Medical 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.

We can see that Jiangsu Canopus Wisdom Medical TechnologyLtd does have institutional investors; and they hold a good portion of the company's stock. 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 Jiangsu Canopus Wisdom Medical 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 Jiangsu Canopus Wisdom Medical TechnologyLtd. The company's largest shareholder is Shiping Wan, with ownership of 25%. In comparison, the second and third largest shareholders hold about 5.1% and 4.5% of the stock.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 11 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Jiangsu Canopus Wisdom Medical 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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 Jiangsu Canopus Wisdom Medical Technology Co.,Ltd.. It has a market capitalization of just CN¥2.0b, and insiders have CN¥642m worth of shares in their own names. 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-- including retail investors -- own 44% stake in the company, and hence can't easily be ignored. 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

Our data indicates that Private Companies hold 4.5%, of the company's shares. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Jiangsu Canopus Wisdom Medical TechnologyLtd has 1 warning sign we think you should be aware of.

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.