Insiders were the biggest winners as Hubei Hongyuan Pharmaceutical Technology Co., Ltd.'s (SZSE:301246) market cap grew by CN¥708m last week

Key Insights

• Insiders appear to have a vested interest in Hubei Hongyuan Pharmaceutical Technology's growth, as seen by their sizeable ownership
• A total of 3 investors have a majority stake in the company with 52% ownership
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Hubei Hongyuan Pharmaceutical Technology Co., Ltd. (SZSE:301246) should be aware of the most powerful shareholder groups. With 60% stake, individual insiders possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit CN¥6.6b market cap following a 12% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Hubei Hongyuan Pharmaceutical Technology.

View our latest analysis for Hubei Hongyuan Pharmaceutical Technology

What Does The Institutional Ownership Tell Us About Hubei Hongyuan Pharmaceutical Technology?

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.

As you can see, institutional investors have a fair amount of stake in Hubei Hongyuan Pharmaceutical Technology. 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 Hubei Hongyuan Pharmaceutical Technology, (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 Hubei Hongyuan Pharmaceutical Technology. Guoping Yin is currently the largest shareholder, with 23% of shares outstanding. For context, the second largest shareholder holds about 22% of the shares outstanding, followed by an ownership of 6.6% by the third-largest shareholder. Shuangxi Xu, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Hubei Hongyuan Pharmaceutical Technology

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders own more than half of Hubei Hongyuan Pharmaceutical Technology Co., Ltd.. This gives them effective control of the company. That means they own CN¥3.9b worth of shares in the CN¥6.6b company. That's quite meaningful. 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 Hubei Hongyuan Pharmaceutical Technology. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 3 warning signs for Hubei Hongyuan Pharmaceutical Technology (1 shouldn't be ignored!) that you should be aware of before investing here.

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.