Zhuzhou Hongda Electronics Corp.,Ltd.'s (SZSE:300726) most bullish insider, CEO Chen Zeng must be pleased with the recent 5.6% gain

Key Insights

• Significant insider control over Zhuzhou Hongda ElectronicsLtd implies vested interests in company growth
• A total of 2 investors have a majority stake in the company with 64% ownership
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Zhuzhou Hongda Electronics Corp.,Ltd. (SZSE:300726), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 69% 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 were the biggest beneficiaries of last week’s 5.6% gain.

Let's delve deeper into each type of owner of Zhuzhou Hongda ElectronicsLtd, beginning with the chart below.

View our latest analysis for Zhuzhou Hongda ElectronicsLtd

What Does The Institutional Ownership Tell Us About Zhuzhou Hongda ElectronicsLtd?

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.

We can see that Zhuzhou Hongda ElectronicsLtd 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 Zhuzhou Hongda ElectronicsLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Zhuzhou Hongda ElectronicsLtd. The company's CEO Chen Zeng is the largest shareholder with 34% of shares outstanding. In comparison, the second and third largest shareholders hold about 30% and 5.1% of the stock.

To make our study more interesting, we found that the top 2 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Zhuzhou Hongda ElectronicsLtd

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 that insiders own more than half the Zhuzhou Hongda Electronics Corp.,Ltd. stock. This gives them a lot of power. Insiders own CN¥12b worth of shares in the CN¥17b company. That's extraordinary! Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public, who are usually individual investors, hold a 23% stake in Zhuzhou Hongda ElectronicsLtd. 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 Zhuzhou Hongda ElectronicsLtd better, we need to consider many other factors. For example, we've discovered 3 warning signs for Zhuzhou Hongda ElectronicsLtd that you should be aware of before investing here.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.