Ningbo Henghe Precision Industry Co.,Ltd.'s (SZSE:300539) CEO Zhi Jun Hu is the most upbeat insider, and their holdings increased by 13% last week

Key Insights

• Ningbo Henghe Precision IndustryLtd's significant insider ownership suggests inherent interests in company's expansion
• The top 2 shareholders own 60% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

Every investor in Ningbo Henghe Precision Industry Co.,Ltd. (SZSE:300539) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 61% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week’s 13% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Ningbo Henghe Precision IndustryLtd.

View our latest analysis for Ningbo Henghe Precision IndustryLtd

What Does The Institutional Ownership Tell Us About Ningbo Henghe Precision IndustryLtd?

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 Ningbo Henghe Precision IndustryLtd 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. 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 Ningbo Henghe Precision IndustryLtd, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Ningbo Henghe Precision IndustryLtd. With a 30% stake, CEO Zhi Jun Hu is the largest shareholder. Huang Xiu Zhu is the second largest shareholder owning 30% of common stock, and First State Cinda Fund Management Company Limited holds about 3.4% of the company stock.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 60% stake.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Ningbo Henghe Precision IndustryLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 most recent data indicates that insiders own the majority of Ningbo Henghe Precision Industry Co.,Ltd.. This means they can collectively make decisions for the company. Given it has a market cap of CN¥1.9b, that means they have CN¥1.2b 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, who are usually individual investors, hold a 31% stake in Ningbo Henghe Precision IndustryLtd. 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 Ningbo Henghe Precision IndustryLtd better, we need to consider many other factors. For instance, we've identified 3 warning signs for Ningbo Henghe Precision IndustryLtd (1 is a bit unpleasant) that you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.