Insiders were the biggest winners as Jiangsu Xiehe Electronic Co.,Ltd.'s (SHSE:605258) market cap grew by CN¥286m last week

Key Insights

• Insiders appear to have a vested interest in Jiangsu Xiehe ElectronicLtd's growth, as seen by their sizeable ownership
• A total of 4 investors have a majority stake in the company with 53% ownership
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of Jiangsu Xiehe Electronic Co.,Ltd. (SHSE:605258), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 63% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit CN¥3.0b market cap following a 10% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about Jiangsu Xiehe ElectronicLtd.

See our latest analysis for Jiangsu Xiehe ElectronicLtd

What Does The Institutional Ownership Tell Us About Jiangsu Xiehe ElectronicLtd?

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.

As you can see, institutional investors have a fair amount of stake in Jiangsu Xiehe ElectronicLtd. 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. 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 Jiangsu Xiehe ElectronicLtd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Jiangsu Xiehe ElectronicLtd. Nanguo Zhang is currently the company's largest shareholder with 18% of shares outstanding. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 11% by the third-largest shareholder. Two of the top three shareholders happen to be Senior Key Executive and Member of the Board of Directors, respectively. That is, insiders feature higher up in the heirarchy of the company's top shareholders.

Our research also brought to light the fact that roughly 53% of the company is controlled by the top 4 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 Jiangsu Xiehe ElectronicLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 own more than half of Jiangsu Xiehe Electronic Co.,Ltd.. This gives them effective control of the company. So they have a CN¥1.9b stake in this CN¥3.0b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 31% stake in Jiangsu Xiehe ElectronicLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Jiangsu Xiehe ElectronicLtd better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Jiangsu Xiehe ElectronicLtd (including 1 which is significant) .

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.