The recent pullback must have dismayed Shen Zhen Australis Electronic Technology Co.,Ltd. (SZSE:300940) insiders who own 40% of the company

Key Insights

• Significant insider control over Shen Zhen Australis Electronic TechnologyLtd implies vested interests in company growth
• 54% of the business is held by the top 5 shareholders
• Institutional ownership in Shen Zhen Australis Electronic TechnologyLtd is 20%

Every investor in Shen Zhen Australis Electronic Technology Co.,Ltd. (SZSE:300940) should be aware of the most powerful shareholder groups. With 40% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, insiders endured the biggest losses as the stock fell by 11%.

Let's delve deeper into each type of owner of Shen Zhen Australis Electronic TechnologyLtd, beginning with the chart below.

View our latest analysis for Shen Zhen Australis Electronic TechnologyLtd

What Does The Institutional Ownership Tell Us About Shen Zhen Australis Electronic TechnologyLtd?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Shen Zhen Australis Electronic TechnologyLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Shen Zhen Australis Electronic TechnologyLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Shen Zhen Australis Electronic TechnologyLtd is not owned by hedge funds. The company's largest shareholder is Faming Jiang, with ownership of 22%. Lianxing Pan is the second largest shareholder owning 18% of common stock, and Jinfuyuan (Hainan) Private Fund Management Partnership Enterprise (Limited Partnership) holds about 5.0% of the company stock. Lianxing Pan, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

Our research also brought to light the fact that roughly 54% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Shen Zhen Australis Electronic TechnologyLtd

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.

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.

Our information suggests that insiders maintain a significant holding in Shen Zhen Australis Electronic Technology Co.,Ltd.. Insiders have a CN¥1.1b stake in this CN¥2.8b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 35% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shen Zhen Australis Electronic TechnologyLtd. 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 5.2%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shen Zhen Australis Electronic TechnologyLtd better, we need to consider many other factors. Be aware that Shen Zhen Australis Electronic TechnologyLtd is showing 1 warning sign in our investment analysis , you should know about...

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.

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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.