G.Tech Technology Ltd.'s (SZSE:301503) most bullish insider, CEO Weiming Xie must be pleased with the recent 16% gain

Key Insights

• Significant insider control over G.Tech Technology implies vested interests in company growth
• A total of 2 investors have a majority stake in the company with 59% ownership
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in G.Tech Technology Ltd. (SZSE:301503) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 59% to be precise, is individual insiders. 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 scored the highest last week as the company hit CN¥3.1b market cap following a 16% gain in the stock.

Let's delve deeper into each type of owner of G.Tech Technology, beginning with the chart below.

View our latest analysis for G.Tech Technology

What Does The Institutional Ownership Tell Us About G.Tech Technology?

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 G.Tech Technology 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. 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 G.Tech Technology's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in G.Tech Technology. With a 30% stake, CEO Weiming Xie is the largest shareholder. Meanwhile, the second and third largest shareholders, hold 29% and 5.6%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. 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 G.Tech Technology

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 that insiders own more than half the G.Tech Technology Ltd. stock. This gives them a lot of power. That means they own CN¥1.8b worth of shares in the CN¥3.1b company. That's quite meaningful. 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 21% stake in G.Tech Technology. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 15%, of the shares on issue. 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 G.Tech Technology better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for G.Tech Technology (of which 1 is a bit concerning!) you should know about.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.