Peng Wei Yang Jiangsu Changhai Composite Materials Co., Ltd's (SZSE:300196) CEO is the most bullish insider, and their stock value gained 11%last week

Key Insights

• Jiangsu Changhai Composite Materials' significant insider ownership suggests inherent interests in company's expansion
• A total of 2 investors have a majority stake in the company with 52% ownership
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of Jiangsu Changhai Composite Materials Co., Ltd (SZSE:300196) can tell us which group is most powerful. With 53% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, insiders benefitted the most after the company's market cap rose by CN¥494m last week.

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

View our latest analysis for Jiangsu Changhai Composite Materials

What Does The Institutional Ownership Tell Us About Jiangsu Changhai Composite Materials?

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.

Jiangsu Changhai Composite Materials already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Jiangsu Changhai Composite Materials, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Jiangsu Changhai Composite Materials. Looking at our data, we can see that the largest shareholder is the CEO Peng Wei Yang with 42% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 11% and 4.5%, of the shares outstanding, respectively.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Jiangsu Changhai Composite Materials

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.

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 the majority of Jiangsu Changhai Composite Materials Co., Ltd. This means they can collectively make decisions for the company. Given it has a market cap of CN¥5.1b, that means they have CN¥2.7b 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, who are usually individual investors, hold a 35% stake in Jiangsu Changhai Composite Materials. 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.

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. To that end, you should be aware of the 2 warning signs we've spotted with Jiangsu Changhai Composite Materials .

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.