Jiangsu Shagang Co., Ltd.'s (SZSE:002075) stock price dropped 7.6% last week; individual investors would not be happy

Key Insights

• Significant control over Jiangsu Shagang by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 25 investors have a majority stake in the company with 41% ownership
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Jiangsu Shagang Co., Ltd. (SZSE:002075) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 59% 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 7.6% decline in share price, individual investors suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Jiangsu Shagang.

See our latest analysis for Jiangsu Shagang

What Does The Institutional Ownership Tell Us About Jiangsu Shagang?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Jiangsu Shagang already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Jiangsu Shagang's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Jiangsu Shagang. Our data shows that Jiangsu Shagang Group Co.,Ltd. is the largest shareholder with 27% of shares outstanding. In comparison, the second and third largest shareholders hold about 3.6% and 3.1% of the stock.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Jiangsu Shagang

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. 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.

We can see that insiders own shares in Jiangsu Shagang Co., Ltd.. This is a big company, so it is good to see this level of alignment. Insiders own CN¥1.0b worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 59% of Jiangsu Shagang shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

We can see that Private Companies own 27%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Jiangsu Shagang better, we need to consider many other factors. Be aware that Jiangsu Shagang is showing 2 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...

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.