Shenzhen Sea Star Technology Co.,Ltd's (SZSE:002137): Top Key Executive Yamei Chen is the most bullish insider, and their stock value gained 17% last week
Key Insights
- Insiders appear to have a vested interest in Shenzhen Sea Star TechnologyLtd's growth, as seen by their sizeable ownership
- The top 3 shareholders own 53% of the company
- Using data from company's past performance alongside ownership research, one can better assess the future performance of a company
A look at the shareholders of Shenzhen Sea Star Technology Co.,Ltd (SZSE:002137) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 53% ownership. 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 were the biggest beneficiaries of last week’s 17% gain.
In the chart below, we zoom in on the different ownership groups of Shenzhen Sea Star TechnologyLtd.
Check out our latest analysis for Shenzhen Sea Star TechnologyLtd
What Does The Institutional Ownership Tell Us About Shenzhen Sea Star 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.
We can see that Shenzhen Sea Star TechnologyLtd does have institutional investors; and they hold a good portion of the company's stock. 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 Shenzhen Sea Star TechnologyLtd's historic earnings and revenue below, but keep in mind there's always more to the story.
We note that hedge funds don't have a meaningful investment in Shenzhen Sea Star TechnologyLtd. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Shenzhen Sea Star TechnologyLtd's case, its Top Key Executive, Yamei Chen, is the largest shareholder, holding 31% of shares outstanding. The second and third largest shareholders are Xin Qiao and Cuan Qiao, with an equal amount of shares to their name at 11%. Interestingly, the second-largest shareholder, Xin Qiao is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.
A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 53% stake.
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 Shenzhen Sea Star 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. 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 information suggests that insiders own more than half of Shenzhen Sea Star Technology Co.,Ltd. This gives them effective control of the company. Given it has a market cap of CN¥5.1b, that means they have CN¥2.7b 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 41% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shenzhen Sea Star 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.
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. For example, we've discovered 3 warning signs for Shenzhen Sea Star TechnologyLtd (1 is potentially serious!) that you should be aware of before investing here.
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.
About SZSE:002137
Excellent balance sheet low.