Owning 48% in Shenzhen Goodix Technology Co., Ltd. (SHSE:603160) means that insiders are heavily invested in the company's future

Key Insights

• Significant insider control over Shenzhen Goodix Technology implies vested interests in company growth
• 51% of the business is held by the top 3 shareholders
• 14% of Shenzhen Goodix Technology is held by Institutions

If you want to know who really controls Shenzhen Goodix Technology Co., Ltd. (SHSE:603160), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 48% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

So it follows, every decision made by insiders of Shenzhen Goodix Technology regarding the company's future would be crucial to them.

In the chart below, we zoom in on the different ownership groups of Shenzhen Goodix Technology.

See our latest analysis for Shenzhen Goodix Technology

What Does The Institutional Ownership Tell Us About Shenzhen Goodix 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 Shenzhen Goodix 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. 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 Shenzhen Goodix Technology's historic earnings and revenue below, but keep in mind there's always more to the story.

Shenzhen Goodix Technology is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Fan Zhang with 45% of shares outstanding. For context, the second largest shareholder holds about 2.9% of the shares outstanding, followed by an ownership of 2.5% by the third-largest shareholder.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Shenzhen Goodix Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own a reasonable proportion of Shenzhen Goodix Technology Co., Ltd.. It has a market capitalization of just CN¥31b, and insiders have CN¥15b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 32% stake in Shenzhen Goodix Technology. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Shenzhen Goodix Technology , and understanding them should be part of your investment process.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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