Great week for SMO ClinPlus CO.,LTD. (SZSE:301257) institutional investors after losing 24% over the previous year

Key Insights

• Given the large stake in the stock by institutions, SMO ClinPlusLTD's stock price might be vulnerable to their trading decisions
• 52% of the business is held by the top 6 shareholders
• Insiders own 13% of SMO ClinPlusLTD

Every investor in SMO ClinPlus CO.,LTD. (SZSE:301257) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 27% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Institutional investors would probably welcome last week's 10% increase in the share price after a year of 24% losses as a sign that returns may to begin trending higher.

Let's delve deeper into each type of owner of SMO ClinPlusLTD, beginning with the chart below.

View our latest analysis for SMO ClinPlusLTD

What Does The Institutional Ownership Tell Us About SMO ClinPlusLTD?

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.

We can see that SMO ClinPlusLTD does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at SMO ClinPlusLTD's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in SMO ClinPlusLTD. Our data shows that Shanghai Xibao Investment Management Co., Ltd. is the largest shareholder with 19% of shares outstanding. Shihezi Ruixin Equity Investment Partnership Enterprise (Limited Partnership) is the second largest shareholder owning 8.0% of common stock, and Hongwei Yang holds about 7.4% of the company stock. Hongwei Yang, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

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.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 SMO ClinPlusLTD

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

It seems insiders own a significant proportion of SMO ClinPlus CO.,LTD.. It has a market capitalization of just CN¥2.3b, and insiders have CN¥314m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 26% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Equity Ownership

With a stake of 25%, private equity firms could influence the SMO ClinPlusLTD board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

It seems that Private Companies own 8.0%, of the SMO ClinPlusLTD stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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. Be aware that SMO ClinPlusLTD is showing 1 warning sign in our investment analysis , you should know about...

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com