Insiders the biggest winners as NanJing Sanchao Advanced Materials Co.,Ltd.'s (SZSE:300554) market cap rises to CN¥3.3b

Key Insights

• Insiders appear to have a vested interest in NanJing Sanchao Advanced MaterialsLtd's growth, as seen by their sizeable ownership
• A total of 2 investors have a majority stake in the company with 51% ownership
• 10% of NanJing Sanchao Advanced MaterialsLtd is held by Institutions

Every investor in NanJing Sanchao Advanced Materials Co.,Ltd. (SZSE:300554) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 52% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥909m last week.

In the chart below, we zoom in on the different ownership groups of NanJing Sanchao Advanced MaterialsLtd.

See our latest analysis for NanJing Sanchao Advanced MaterialsLtd

What Does The Institutional Ownership Tell Us About NanJing Sanchao Advanced MaterialsLtd?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

NanJing Sanchao Advanced MaterialsLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 NanJing Sanchao Advanced MaterialsLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

NanJing Sanchao Advanced MaterialsLtd is not owned by hedge funds. Yu Yao Zou is currently the company's largest shareholder with 41% of shares outstanding. Jian Xun Liu is the second largest shareholder owning 9.7% of common stock, and UBS Asset Management AG holds about 2.6% of the company stock.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 51% stake.

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

Insider Ownership Of NanJing Sanchao Advanced MaterialsLtd

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.

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 the majority of NanJing Sanchao Advanced Materials Co.,Ltd.. This means they can collectively make decisions for the company. Given it has a market cap of CN¥3.3b, that means they have CN¥1.7b worth of shares. 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

With a 38% ownership, the general public, mostly comprising of individual investors, have some degree of sway over NanJing Sanchao Advanced MaterialsLtd. 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. Take risks for example - NanJing Sanchao Advanced MaterialsLtd has 1 warning sign we think you should be aware of.

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.

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

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.