Following recent decline, XDC Industries (Shenzhen) Limited's (SZSE:300615) top shareholder CEO Weiping Shi sees holdings value drop by 10%

Key Insights

• XDC Industries (Shenzhen)'s significant insider ownership suggests inherent interests in company's expansion
• A total of 3 investors have a majority stake in the company with 54% ownership
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in XDC Industries (Shenzhen) Limited (SZSE:300615) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 56% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders as a group endured the highest losses after market cap fell by CN¥179m.

Let's take a closer look to see what the different types of shareholders can tell us about XDC Industries (Shenzhen).

See our latest analysis for XDC Industries (Shenzhen)

What Does The Institutional Ownership Tell Us About XDC Industries (Shenzhen)?

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.

We can see that XDC Industries (Shenzhen) does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 XDC Industries (Shenzhen)'s earnings history below. Of course, the future is what really matters.

XDC Industries (Shenzhen) is not owned by hedge funds. With a 29% stake, CEO Weiping Shi is the largest shareholder. Meanwhile, the second and third largest shareholders, hold 13% and 13%, of the shares outstanding, respectively.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of XDC Industries (Shenzhen)

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.

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 most recent data indicates that insiders own the majority of XDC Industries (Shenzhen) Limited. This means they can collectively make decisions for the company. Given it has a market cap of CN¥1.6b, that means they have CN¥893m worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 37% stake in XDC Industries (Shenzhen). 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand XDC Industries (Shenzhen) better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for XDC Industries (Shenzhen) you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com