Insiders were the key beneficiaries as Xinjiang Xintai Natural Gas Co., Ltd.'s (SHSE:603393) market cap rises to CN¥12b

Key Insights

• Xinjiang Xintai Natural Gas' significant insider ownership suggests inherent interests in company's expansion
• A total of 4 investors have a majority stake in the company with 50% ownership
• 12% of Xinjiang Xintai Natural Gas is held by Institutions

A look at the shareholders of Xinjiang Xintai Natural Gas Co., Ltd. (SHSE:603393) can tell us which group is most powerful. With 51% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit CN¥12b market cap following a 5.0% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Xinjiang Xintai Natural Gas.

See our latest analysis for Xinjiang Xintai Natural Gas

What Does The Institutional Ownership Tell Us About Xinjiang Xintai Natural Gas?

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.

As you can see, institutional investors have a fair amount of stake in Xinjiang Xintai Natural Gas. 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. 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 Xinjiang Xintai Natural Gas, (below). Of course, keep in mind that there are other factors to consider, too.

Xinjiang Xintai Natural Gas is not owned by hedge funds. Our data shows that Zai Yuan Ming is the largest shareholder with 42% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 3.5% and 2.5%, of the shares outstanding, respectively.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Xinjiang Xintai Natural Gas

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.

Our information suggests that insiders own more than half of Xinjiang Xintai Natural Gas Co., Ltd.. This gives them effective control of the company. Given it has a market cap of CN¥12b, that means insiders have a whopping CN¥6.2b worth of shares in their own names. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

With a 37% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Xinjiang Xintai Natural Gas. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Xinjiang Xintai Natural Gas better, we need to consider many other factors.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.