Private companies among Lizhong Sitong Light Alloys Group Co., Ltd.'s (SZSE:300428) largest stockholders and were hit after last week's 5.9% price drop

Key Insights

• The considerable ownership by private companies in Lizhong Sitong Light Alloys Group indicates that they collectively have a greater say in management and business strategy
• A total of 3 investors have a majority stake in the company with 57% ownership
• 32% of Lizhong Sitong Light Alloys Group is held by insiders

A look at the shareholders of Lizhong Sitong Light Alloys Group Co., Ltd. (SZSE:300428) can tell us which group is most powerful. With 37% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders, who own 32% shares weren’t spared from last week’s CN¥782m market cap drop, private companies as a group suffered the maximum losses

Let's take a closer look to see what the different types of shareholders can tell us about Lizhong Sitong Light Alloys Group.

See our latest analysis for Lizhong Sitong Light Alloys Group

What Does The Institutional Ownership Tell Us About Lizhong Sitong Light Alloys Group?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Lizhong Sitong Light Alloys Group 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 Lizhong Sitong Light Alloys Group, (below). Of course, keep in mind that there are other factors to consider, too.

Lizhong Sitong Light Alloys Group is not owned by hedge funds. Our data shows that Li Zhong Investment Ltd is the largest shareholder with 36% of shares outstanding. The second and third largest shareholders are Liguo Zang and Lizhong Zang, with an equal amount of shares to their name at 11%. Additionally, the company's CEO Yongxing Zang directly holds 11% of the total shares outstanding.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Lizhong Sitong Light Alloys Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 Lizhong Sitong Light Alloys Group Co., Ltd.. Insiders own CN¥4.0b worth of shares in the CN¥12b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public-- including retail investors -- own 23% stake in the company, and hence can't easily be ignored. 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

We can see that Private Companies own 37%, 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Lizhong Sitong Light Alloys Group better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Lizhong Sitong Light Alloys Group (at least 1 which doesn't sit too well with us) , and understanding them should be part of your investment process.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.