Sichuan Guoguang Agrochemical Co., Ltd.'s (SZSE:002749) market cap increased by CN¥417m, insiders receive a 63% cut

Key Insights

• Insiders appear to have a vested interest in Sichuan Guoguang Agrochemical's growth, as seen by their sizeable ownership
• A total of 6 investors have a majority stake in the company with 52% ownership
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of Sichuan Guoguang Agrochemical Co., Ltd. (SZSE:002749), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 63% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥417m last week.

In the chart below, we zoom in on the different ownership groups of Sichuan Guoguang Agrochemical.

Check out our latest analysis for Sichuan Guoguang Agrochemical

What Does The Institutional Ownership Tell Us About Sichuan Guoguang Agrochemical?

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.

We can see that Sichuan Guoguang Agrochemical does have institutional investors; and they hold a good portion of the company's stock. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Sichuan Guoguang Agrochemical's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Sichuan Guoguang Agrochemical. Looking at our data, we can see that the largest shareholder is Chang Xu Yan with 34% of shares outstanding. The second and third largest shareholders are Ya Qi Yan and Lixia Hu, with an equal amount of shares to their name at 4.4%.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 Sichuan Guoguang Agrochemical

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

It seems that insiders own more than half the Sichuan Guoguang Agrochemical Co., Ltd. stock. This gives them a lot of power. Given it has a market cap of CN¥6.6b, that means they have CN¥4.2b 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-- including retail investors -- own 28% 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Sichuan Guoguang Agrochemical better, we need to consider many other factors. Be aware that Sichuan Guoguang Agrochemical is showing 1 warning sign in our investment analysis , you should know about...

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.