The recent CN¥364m market cap decrease is likely to have disappointed insiders invested in Tuoxin Pharmaceutical Group Co.,Ltd. (SZSE:301089)

Key Insights

• Significant insider control over Tuoxin Pharmaceutical GroupLtd implies vested interests in company growth
• A total of 5 investors have a majority stake in the company with 52% ownership
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Tuoxin Pharmaceutical Group Co.,Ltd. (SZSE:301089) should be aware of the most powerful shareholder groups. With 55% 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 a result, insiders as a group endured the highest losses after market cap fell by CN¥364m.

Let's take a closer look to see what the different types of shareholders can tell us about Tuoxin Pharmaceutical GroupLtd.

Check out our latest analysis for Tuoxin Pharmaceutical GroupLtd

What Does The Institutional Ownership Tell Us About Tuoxin Pharmaceutical GroupLtd?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Institutions have a very small stake in Tuoxin Pharmaceutical GroupLtd. 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 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 Tuoxin Pharmaceutical GroupLtd. Our data shows that Xining Yang is the largest shareholder with 27% of shares outstanding. Shenglin Xian is the second largest shareholder owning 14% of common stock, and Yuying Cai holds about 4.2% of the company stock. Yuying Cai, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

Our research also brought to light the fact that roughly 52% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Tuoxin Pharmaceutical GroupLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 information suggests that insiders own more than half of Tuoxin Pharmaceutical Group Co.,Ltd.. This gives them effective control of the company. That means they own CN¥2.2b worth of shares in the CN¥3.9b company. That's quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 40% stake in Tuoxin Pharmaceutical GroupLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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 example, we've discovered 1 warning sign for Tuoxin Pharmaceutical GroupLtd that you should be aware of before investing here.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.