Individual investors invested in GUOMAI Culture & Media Co., Ltd. (SZSE:301052) up 10% last week, insiders too were rewarded

Key Insights

• The considerable ownership by individual investors in GUOMAI Culture & Media indicates that they collectively have a greater say in management and business strategy
• A total of 25 investors have a majority stake in the company with 45% ownership
• 25% of GUOMAI Culture & Media is held by insiders

A look at the shareholders of GUOMAI Culture & Media Co., Ltd. (SZSE:301052) can tell us which group is most powerful. The group holding the most number of shares in the company, around 55% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Individual investors gained the most after market cap touched CN¥3.0b last week, while insiders who own 25% also benefitted.

In the chart below, we zoom in on the different ownership groups of GUOMAI Culture & Media.

Check out our latest analysis for GUOMAI Culture & Media

What Does The Institutional Ownership Tell Us About GUOMAI Culture & Media?

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.

We can see that GUOMAI Culture & Media does have institutional investors; and they hold a good portion of the company's stock. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see GUOMAI Culture & Media's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in GUOMAI Culture & Media. Jinbo Lu is currently the largest shareholder, with 24% of shares outstanding. Gongqingcheng Jiaen Investment Management Partnership Enterprise (Limited Partnership) is the second largest shareholder owning 5.1% of common stock, and Bona Film Group Co., Ltd. holds about 2.7% of the company stock.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 GUOMAI Culture & Media

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 GUOMAI Culture & Media Co., Ltd.. Insiders own CN¥747m worth of shares in the CN¥3.0b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 55% stake in GUOMAI Culture & Media, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

Our data indicates that Private Companies hold 6.8%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand GUOMAI Culture & Media better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for GUOMAI Culture & Media (of which 1 is significant!) you should know about.

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.