After the recent decline, SG Micro Corp (SZSE:300661) CEO Shilong Zhang's holdings have lost 12% of their value

Key Insights

• Significant insider control over SG Micro implies vested interests in company growth
• A total of 9 investors have a majority stake in the company with 52% ownership
• Institutions own 33% of SG Micro

A look at the shareholders of SG Micro Corp (SZSE:300661) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 33% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, insiders endured the biggest losses as the stock fell by 12%.

In the chart below, we zoom in on the different ownership groups of SG Micro.

See our latest analysis for SG Micro

What Does The Institutional Ownership Tell Us About SG Micro?

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.

SG Micro already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 SG Micro's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in SG Micro. With a 19% stake, CEO Shilong Zhang is the largest shareholder. In comparison, the second and third largest shareholders hold about 8.4% and 5.1% of the stock. Interestingly, the second and third-largest shareholders also happen to be the Secretary and Member of the Board of Directors, respectively. This once again signifies considerable insider ownership amongst the company's top shareholders.

On further inspection, we found that more than half the company's shares are owned by the top 9 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of SG Micro

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. 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 information suggests that insiders maintain a significant holding in SG Micro Corp. It has a market capitalization of just CN¥36b, and insiders have CN¥12b 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-- including retail investors -- own 30% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 4.7%, of the company's shares. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand SG Micro better, we need to consider many other factors.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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.