Insiders with their considerable ownership were the key benefactors as Shandong Daye Co., Ltd. (SHSE:603278) touches CN¥2.0b market cap

Key Insights

• Shandong Daye's significant insider ownership suggests inherent interests in company's expansion
• A total of 2 investors have a majority stake in the company with 51% ownership
• 12% of Shandong Daye is held by Institutions

If you want to know who really controls Shandong Daye Co., Ltd. (SHSE:603278), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 53% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit CN¥2.0b market cap following a 15% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Shandong Daye.

View our latest analysis for Shandong Daye

What Does The Institutional Ownership Tell Us About Shandong Daye?

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.

Shandong Daye 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 Shandong Daye, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Shandong Daye. Yong Dou is currently the company's largest shareholder with 33% of shares outstanding. With 18% and 3.2% of the shares outstanding respectively, Baosen Dou and China Asset Management Co. Ltd. are the second and third largest shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of 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. 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 Shandong Daye

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders own more than half of Shandong Daye Co., Ltd.. This gives them effective control of the company. Given it has a market cap of CN¥2.0b, that means they have CN¥1.1b worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 34% stake in Shandong Daye. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 5 warning signs for Shandong Daye (2 are a bit unpleasant!) that you should be aware of before investing here.

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.

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