The recent pullback must have dismayed Sanwei Holding Group Co.,Ltd (SHSE:603033) insiders who own 62% of the company

Key Insights

• Significant insider control over Sanwei Holding GroupLtd implies vested interests in company growth
• The top 2 shareholders own 58% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Sanwei Holding Group Co.,Ltd (SHSE:603033) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 62% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 4.8% decline in share price, insiders suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Sanwei Holding GroupLtd.

See our latest analysis for Sanwei Holding GroupLtd

What Does The Institutional Ownership Tell Us About Sanwei Holding GroupLtd?

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 Sanwei Holding GroupLtd 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. 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 Sanwei Holding GroupLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Sanwei Holding GroupLtd is not owned by hedge funds. Ji Yue Ye is currently the largest shareholder, with 44% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 14% and 5.0%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Sanwei Holding GroupLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 the majority of Sanwei Holding Group Co.,Ltd. This means they can collectively make decisions for the company. Insiders own CN¥7.7b worth of shares in the CN¥13b company. That's extraordinary! It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sanwei Holding GroupLtd. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Sanwei Holding GroupLtd better, we need to consider many other factors. For example, we've discovered 2 warning signs for Sanwei Holding GroupLtd (1 doesn't sit too well with us!) that you should be aware of before investing here.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.