Sichuan Anning Iron and Titanium Co.,Ltd.'s (SZSE:002978) last week's 4.5% decline must have disappointed private companies who have a significant stake

Key Insights

• The considerable ownership by private companies in Sichuan Anning Iron and TitaniumLtd indicates that they collectively have a greater say in management and business strategy
• 76% of the business is held by the top 2 shareholders
• Insiders own 34% of Sichuan Anning Iron and TitaniumLtd

To get a sense of who is truly in control of Sichuan Anning Iron and Titanium Co.,Ltd. (SZSE:002978), it is important to understand the ownership structure of the business. With 42% stake, private companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While the holdings of private companies took a hit after last week’s 4.5% price drop, insiders with their 34% also suffered.

Let's delve deeper into each type of owner of Sichuan Anning Iron and TitaniumLtd, beginning with the chart below.

View our latest analysis for Sichuan Anning Iron and TitaniumLtd

What Does The Institutional Ownership Tell Us About Sichuan Anning Iron and TitaniumLtd?

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.

Less than 5% of Sichuan Anning Iron and TitaniumLtd is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. 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.

Hedge funds don't have many shares in Sichuan Anning Iron and TitaniumLtd. Chengdu Zidong Investment Co., Ltd. is currently the largest shareholder, with 42% of shares outstanding. In comparison, the second and third largest shareholders hold about 34% and 0.3% of the stock.

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 it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Sichuan Anning Iron and TitaniumLtd

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

Our most recent data indicates that insiders own a reasonable proportion of Sichuan Anning Iron and Titanium Co.,Ltd.. It is very interesting to see that insiders have a meaningful CN¥3.8b stake in this CN¥11b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 21% stake in Sichuan Anning Iron and TitaniumLtd. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 42%, of the company's shares. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Sichuan Anning Iron and TitaniumLtd is showing 2 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.