After the recent decline, Guangdong Modern High-tech Fiber Co., Ltd (SZSE:300876) CEO Qinghai Guo's holdings have lost 14% of their value

Key Insights

• Guangdong Modern High-tech Fiber's significant insider ownership suggests inherent interests in company's expansion
• Qinghai Guo owns 64% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of Guangdong Modern High-tech Fiber Co., Ltd (SZSE:300876) can tell us which group is most powerful. With 64% 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.

As market cap fell to CN¥1.7b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Guangdong Modern High-tech Fiber, beginning with the chart below.

See our latest analysis for Guangdong Modern High-tech Fiber

What Does The Institutional Ownership Tell Us About Guangdong Modern High-tech Fiber?

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.

Institutions have a very small stake in Guangdong Modern High-tech Fiber. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. 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.

Guangdong Modern High-tech Fiber is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Qinghai Guo with 64% of shares outstanding. With such a huge stake, we infer that they have significant control of the future of the company. It's usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider with such skin in the game. In comparison, the second and third largest shareholders hold about 3.8% and 1.6% of the stock.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Guangdong Modern High-tech Fiber

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders own more than half of Guangdong Modern High-tech Fiber Co., Ltd. This gives them effective control of the company. Given it has a market cap of CN¥1.7b, that means they have CN¥1.1b 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 28% stake in Guangdong Modern High-tech Fiber. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 3.8%, of the Guangdong Modern High-tech Fiber stock. 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 Guangdong Modern High-tech Fiber better, we need to consider many other factors. Case in point: We've spotted 5 warning signs for Guangdong Modern High-tech Fiber you should be aware of, and 4 of them are a bit unpleasant.

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.