Private companies in XinJiang Ba Yi Iron & Steel Co.,Ltd. (SHSE:600581) are its biggest bettors, and their bets paid off as stock gained 13% last week

Key Insights

• XinJiang Ba Yi Iron & SteelLtd's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 50% of the company is held by a single shareholder (China Baowu Steel Group Co.,Ltd)
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

A look at the shareholders of XinJiang Ba Yi Iron & Steel Co.,Ltd. (SHSE:600581) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 51% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, private companies collectively scored the highest last week as the company hit CN¥5.4b market cap following a 13% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about XinJiang Ba Yi Iron & SteelLtd.

Check out our latest analysis for XinJiang Ba Yi Iron & SteelLtd

What Does The Institutional Ownership Tell Us About XinJiang Ba Yi Iron & SteelLtd?

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.

As you can see, institutional investors have a fair amount of stake in XinJiang Ba Yi Iron & SteelLtd. 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 XinJiang Ba Yi Iron & SteelLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in XinJiang Ba Yi Iron & SteelLtd. The company's largest shareholder is China Baowu Steel Group Co.,Ltd, with ownership of 50%. This implies that they have majority interest control of the future of the company. National Council for Social Security Fund is the second largest shareholder owning 2.0% of common stock, and Dacheng Fund Management Co., Ltd. holds about 1.1% of the company stock.

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 XinJiang Ba Yi Iron & SteelLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own less than 1% of XinJiang Ba Yi Iron & Steel Co.,Ltd.. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It appears that the board holds about CN¥1.4m worth of stock. This compares to a market capitalization of CN¥5.4b. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

With a 41% ownership, the general public, mostly comprising of individual investors, have some degree of sway over XinJiang Ba Yi Iron & SteelLtd. 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

We can see that Private Companies own 51%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private 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. Be aware that XinJiang Ba Yi Iron & SteelLtd is showing 1 warning sign in our investment analysis , you should know about...

Of course this may not be the best stock to buy. So take a peek at this free 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.

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.