Shenzhen Longood Intelligent Electric Co.,LTD's (SZSE:300543) market cap up CN¥359m last week, benefiting both retail investors who own 58% as well as insiders

Key Insights

• The considerable ownership by retail investors in Shenzhen Longood Intelligent ElectricLTD indicates that they collectively have a greater say in management and business strategy
• A total of 25 investors have a majority stake in the company with 42% ownership
• 39% of Shenzhen Longood Intelligent ElectricLTD is held by insiders

Every investor in Shenzhen Longood Intelligent Electric Co.,LTD (SZSE:300543) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 58% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 11% increase in the stock price last week, retail investors profited the most, but insiders who own 39% stock also stood to gain from the increase.

In the chart below, we zoom in on the different ownership groups of Shenzhen Longood Intelligent ElectricLTD.

Check out our latest analysis for Shenzhen Longood Intelligent ElectricLTD

What Does The Institutional Ownership Tell Us About Shenzhen Longood Intelligent ElectricLTD?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Institutions have a very small stake in Shenzhen Longood Intelligent ElectricLTD. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Shenzhen Longood Intelligent ElectricLTD. With a 22% stake, CEO Jing Chen is the largest shareholder. For context, the second largest shareholder holds about 4.6% of the shares outstanding, followed by an ownership of 4.5% by the third-largest shareholder. Interestingly, the third-largest shareholder, Peiran Liu is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 Shenzhen Longood Intelligent ElectricLTD

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems insiders own a significant proportion of Shenzhen Longood Intelligent Electric Co.,LTD. Insiders have a CN¥1.4b stake in this CN¥3.7b 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

The general public -- including retail investors -- own 58% of Shenzhen Longood Intelligent ElectricLTD. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

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 4 warning signs for Shenzhen Longood Intelligent ElectricLTD (2 don't sit too well with us!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.