Insiders were the key beneficiaries as Zhejiang Jiecang Linear Motion Technology Co.,Ltd.'s (SHSE:603583) market cap rises to CN¥11b

Key Insights

• Zhejiang Jiecang Linear Motion TechnologyLtd's significant insider ownership suggests inherent interests in company's expansion
• 51% of the business is held by the top 3 shareholders
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

Every investor in Zhejiang Jiecang Linear Motion Technology Co.,Ltd. (SHSE:603583) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 50% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders were the biggest beneficiaries of last week’s 9.8% gain.

In the chart below, we zoom in on the different ownership groups of Zhejiang Jiecang Linear Motion TechnologyLtd.

See our latest analysis for Zhejiang Jiecang Linear Motion TechnologyLtd

What Does The Institutional Ownership Tell Us About Zhejiang Jiecang Linear Motion TechnologyLtd?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Zhejiang Jiecang Linear Motion TechnologyLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Zhejiang Jiecang Linear Motion TechnologyLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Zhejiang Jiecang Linear Motion TechnologyLtd. Renchang Hu is currently the company's largest shareholder with 27% of shares outstanding. In comparison, the second and third largest shareholders hold about 17% and 6.4% of the stock.

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 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 Zhejiang Jiecang Linear Motion 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. 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 information suggests that insiders own more than half of Zhejiang Jiecang Linear Motion Technology Co.,Ltd.. This gives them effective control of the company. That means insiders have a very meaningful CN¥5.3b stake in this CN¥11b business. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

The general public-- including retail investors -- own 35% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 7.3%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 1 warning sign for Zhejiang Jiecang Linear Motion TechnologyLtd that you should be aware of before investing here.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.