Appotronics Corporation Limited's (SHSE:688007) stock price dropped 7.7% last week; retail investors would not be happy

Key Insights

• The considerable ownership by retail investors in Appotronics indicates that they collectively have a greater say in management and business strategy
• A total of 15 investors have a majority stake in the company with 50% ownership
• 25% of Appotronics is held by insiders

A look at the shareholders of Appotronics Corporation Limited (SHSE:688007) can tell us which group is most powerful. The group holding the most number of shares in the company, around 48% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 7.7% decrease in the stock price last week, retail investors suffered the most losses, but insiders who own 25% stock also took a hit.

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

View our latest analysis for Appotronics

What Does The Institutional Ownership Tell Us About Appotronics?

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 Appotronics does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Appotronics' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Appotronics. Looking at our data, we can see that the largest shareholder is the CEO Yi Li with 23% of shares outstanding. Nantong Kangchengheng Nengda Venture Capital Management Co., Ltd. is the second largest shareholder owning 4.0% of common stock, and Shenzhen Appotronics Daye Investment Limited Partnership Enterprise (Limited Partnership) holds about 3.7% of the company stock.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 15 shareholders, meaning that no single shareholder has a majority interest in the ownership.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Appotronics

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems insiders own a significant proportion of Appotronics Corporation Limited. It has a market capitalization of just CN¥7.7b, and insiders have CN¥1.9b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 48% stake in Appotronics. 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

It seems that Private Companies own 13%, of the Appotronics 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:

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. Case in point: We've spotted 1 warning sign for Appotronics you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.