Hefei Gocom Information Technology Co.,Ltd. (SHSE:688367) surges 11%; individual investors who own 39% shares profited along with insiders

Key Insights

• The considerable ownership by individual investors in Hefei Gocom Information TechnologyLtd indicates that they collectively have a greater say in management and business strategy
• The top 9 shareholders own 51% of the company
• Insider ownership in Hefei Gocom Information TechnologyLtd is 29%

Every investor in Hefei Gocom Information Technology Co.,Ltd. (SHSE:688367) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 39% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While individual investors were the group that reaped the most benefits after last week’s 11% price gain, insiders also received a 29% cut.

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

Check out our latest analysis for Hefei Gocom Information TechnologyLtd

What Does The Institutional Ownership Tell Us About Hefei Gocom Information 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.

As you can see, institutional investors have a fair amount of stake in Hefei Gocom Information TechnologyLtd. 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. 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 Hefei Gocom Information TechnologyLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Hefei Gocom Information TechnologyLtd. With a 15% stake, CEO Zhen Wei is the largest shareholder. With 9.5% and 6.5% of the shares outstanding respectively, Hefei Huazhen Investment Management Co., Ltd. and Hefei University of Technology Asset Management Co., Ltd. are the second and third largest shareholders.

We did some more digging and found that 9 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Hefei Gocom Information TechnologyLtd

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 most recent data indicates that insiders own a reasonable proportion of Hefei Gocom Information Technology Co.,Ltd.. It has a market capitalization of just CN¥1.1b, and insiders have CN¥321m worth of shares in their own names. 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 39% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Hefei Gocom Information TechnologyLtd. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 16%, of the Hefei Gocom Information TechnologyLtd 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Hefei Gocom Information TechnologyLtd better, we need to consider many other factors. Be aware that Hefei Gocom Information TechnologyLtd is showing 3 warning signs in our investment analysis , and 1 of those can't be ignored...

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.