Sansteel MinGuang Co.,Ltd.,Fujian's (SZSE:002110) stock price dropped 9.2% last week; private companies would not be happy

Key Insights

• Significant control over Sansteel MinGuangLtd.Fujian by private companies implies that the general public has more power to influence management and governance-related decisions
• 57% of the company is held by a single shareholder (Fujian Sanming Iron and Steel (Group) Co., Ltd.)
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Sansteel MinGuang Co.,Ltd.,Fujian (SZSE:002110) should be aware of the most powerful shareholder groups. With 59% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, private companies endured the biggest losses as the stock fell by 9.2%.

Let's delve deeper into each type of owner of Sansteel MinGuangLtd.Fujian, beginning with the chart below.

View our latest analysis for Sansteel MinGuangLtd.Fujian

What Does The Institutional Ownership Tell Us About Sansteel MinGuangLtd.Fujian?

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.

Sansteel MinGuangLtd.Fujian 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. 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 Sansteel MinGuangLtd.Fujian, (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 Sansteel MinGuangLtd.Fujian. Our data shows that Fujian Sanming Iron and Steel (Group) Co., Ltd. is the largest shareholder with 57% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With 4.0% and 1.7% of the shares outstanding respectively, Xiamen ITG Group Corp.,Ltd and Fujian Expressway Maintenance Engineering Co., Ltd. are the second and third largest shareholders.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Sansteel MinGuangLtd.Fujian

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.

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 Sansteel MinGuang Co.,Ltd.,Fujian insiders own under 1% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Keep in mind that it's a big company, and the insiders own CN¥3.9m worth of shares. The absolute value might be more important than the proportional share. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 30% stake in the company, and hence can't easily be ignored. 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 59%, of the shares on issue. 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.

Public Company Ownership

Public companies currently own 4.4% of Sansteel MinGuangLtd.Fujian stock. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Sansteel MinGuangLtd.Fujian better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Sansteel MinGuangLtd.Fujian , and understanding them should be part of your investment process.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.