Shanghai Hollywave Electronic System Co., Ltd.'s (SHSE:688682) CEO Jianhua Zhou is the most upbeat insider, and their holdings increased by 18% last week

Key Insights

• Insiders appear to have a vested interest in Shanghai Hollywave Electronic System's growth, as seen by their sizeable ownership
• The top 4 shareholders own 56% of the company
• 13% of Shanghai Hollywave Electronic System is held by Institutions

If you want to know who really controls Shanghai Hollywave Electronic System Co., Ltd. (SHSE:688682), 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 49% 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).

As a result, insiders scored the highest last week as the company hit CN¥2.3b market cap following a 18% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about Shanghai Hollywave Electronic System.

See our latest analysis for Shanghai Hollywave Electronic System

What Does The Institutional Ownership Tell Us About Shanghai Hollywave Electronic System?

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 Shanghai Hollywave Electronic System. 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 Shanghai Hollywave Electronic System's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Shanghai Hollywave Electronic System. With a 27% stake, CEO Jianhua Zhou is the largest shareholder. Meanwhile, the second and third largest shareholders, hold 15% and 7.5%, of the shares outstanding, respectively.

On looking further, we found that 56% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Shanghai Hollywave Electronic System

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own a reasonable proportion of Shanghai Hollywave Electronic System Co., Ltd.. Insiders have a CN¥1.1b stake in this CN¥2.3b business. 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

With a 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shanghai Hollywave Electronic System. 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 Company Ownership

It seems that Private Companies own 11%, of the Shanghai Hollywave Electronic System stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Shanghai Hollywave Electronic System (of which 2 are concerning!) you should know about.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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