The recent 9.6% gain must have brightened CEO Yonggang Zhang's week, Wuxi Holyview Microelectronics Co.,Ltd.'s (SHSE:603375) most bullish insider

Key Insights

• Significant insider control over Wuxi Holyview MicroelectronicsLtd implies vested interests in company growth
• The top 3 shareholders own 57% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

Every investor in Wuxi Holyview Microelectronics Co.,Ltd. (SHSE:603375) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 38% ownership. 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¥407m last week.

In the chart below, we zoom in on the different ownership groups of Wuxi Holyview MicroelectronicsLtd.

Check out our latest analysis for Wuxi Holyview MicroelectronicsLtd

What Does The Institutional Ownership Tell Us About Wuxi Holyview MicroelectronicsLtd?

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.

We can see that Wuxi Holyview MicroelectronicsLtd 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 Wuxi Holyview MicroelectronicsLtd'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 Wuxi Holyview MicroelectronicsLtd. The company's CEO Yonggang Zhang is the largest shareholder with 28% of shares outstanding. With 20% and 8.6% of the shares outstanding respectively, Shenzhen Fuhai Xinwan Equity Investment Fund Management Enterprise (L.P.) and Wuxi Jiuanxin Electronic Technology Partnership Enterprise (Limited Partnership) are the second and third largest shareholders.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 Wuxi Holyview MicroelectronicsLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 Wuxi Holyview Microelectronics Co.,Ltd.. Insiders have a CN¥1.7b stake in this CN¥4.7b 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 23% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Wuxi Holyview MicroelectronicsLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 20% stake in Wuxi Holyview MicroelectronicsLtd. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

We can see that Private Companies own 9.8%, of the shares on issue. 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:

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 - Wuxi Holyview MicroelectronicsLtd has 3 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.