Ningbo Color Master Batch Co., Ltd.'s (SZSE:301019) largest shareholder, CEO Weiqing Ren sees holdings value fall by 12% following recent drop

Key Insights

• Significant insider control over Ningbo Color Master Batch implies vested interests in company growth
• 51% of the business is held by the top 6 shareholders
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

A look at the shareholders of Ningbo Color Master Batch Co., Ltd. (SZSE:301019) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 48% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 12% decline in share price, insiders suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Ningbo Color Master Batch.

See our latest analysis for Ningbo Color Master Batch

What Does The Institutional Ownership Tell Us About Ningbo Color Master Batch?

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 Ningbo Color Master Batch 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. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Hedge funds don't have many shares in Ningbo Color Master Batch. With a 32% stake, CEO Weiqing Ren is the largest shareholder. With 5.5% and 4.4% of the shares outstanding respectively, Ningbo Huangrunyuan Equity Investment Partnership Enterprise (Limited Partnership) and Ningbo Lanrunyuan Equity Investment Partnership Enterprise (Limited Partnership) are the second and third largest shareholders.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Ningbo Color Master Batch

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 most recent data indicates that insiders own a reasonable proportion of Ningbo Color Master Batch Co., Ltd.. Insiders have a CN¥1.2b stake in this CN¥2.5b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 38% stake in the company, and hence can't easily be ignored. 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

Our data indicates that Private Companies hold 12%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 3 warning signs for Ningbo Color Master Batch (2 are significant) 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.