Private companies among Era Co., Ltd.'s (SZSE:002641) largest stockholders and were hit after last week's 9.4% price drop
Key Insights
- Significant control over Era by private companies implies that the general public has more power to influence management and governance-related decisions
- A total of 2 investors have a majority stake in the company with 52% ownership
- Insiders own 25% of Era
A look at the shareholders of Era Co., Ltd. (SZSE:002641) can tell us which group is most powerful. With 39% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
And following last week's 9.4% decline in share price, private companies suffered the most losses.
In the chart below, we zoom in on the different ownership groups of Era.
See our latest analysis for Era
What Does The Institutional Ownership Tell Us About Era?
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.
Institutions have a very small stake in Era. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.
We note that hedge funds don't have a meaningful investment in Era. Looking at our data, we can see that the largest shareholder is China ERA Plastic Industry Group Co., Ltd. with 38% of shares outstanding. With 13% and 8.6% of the shares outstanding respectively, Caifen Lu and Wei Zhang are the second and third largest shareholders. Wei Zhang, who is the third-largest shareholder, also happens to hold the title of Vice Chairman.
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.
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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Era
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 insiders maintain a significant holding in Era Co., Ltd.. It has a market capitalization of just CN¥5.1b, and insiders have CN¥1.3b worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.
General Public Ownership
The general public-- including retail investors -- own 32% stake in the company, and hence can't easily be ignored. 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.
Private Company Ownership
We can see that Private Companies own 39%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Era you should know about.
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.
About SZSE:002641
Era
Research, develops, produces, and sells plastic pipe products in China.
Flawless balance sheet established dividend payer.