Shaanxi Meineng Clean Energy Corp.,Ltd.'s (SZSE:001299) last week's 10% decline must have disappointed private companies who have a significant stake

Key Insights

• The considerable ownership by private companies in Shaanxi Meineng Clean EnergyLtd indicates that they collectively have a greater say in management and business strategy
• 54% of the company is held by a single shareholder (Shaanxi Fengsheng Enterprise Management Co., Ltd.)
• Insiders own 18% of Shaanxi Meineng Clean EnergyLtd

A look at the shareholders of Shaanxi Meineng Clean Energy Corp.,Ltd. (SZSE:001299) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 57% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 10% decline in share price, private companies suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Shaanxi Meineng Clean EnergyLtd.

View our latest analysis for Shaanxi Meineng Clean EnergyLtd

What Does The Institutional Ownership Tell Us About Shaanxi Meineng Clean EnergyLtd?

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.

Less than 5% of Shaanxi Meineng Clean EnergyLtd is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. 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.

Hedge funds don't have many shares in Shaanxi Meineng Clean EnergyLtd. Shaanxi Fengsheng Enterprise Management Co., Ltd. is currently the company's largest shareholder with 54% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. In comparison, the second and third largest shareholders hold about 11% and 4.7% of the stock.

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. 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 Shaanxi Meineng Clean EnergyLtd

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. 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 a reasonable proportion of Shaanxi Meineng Clean Energy Corp.,Ltd.. Insiders have a CN¥414m stake in this CN¥2.3b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 21% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 57%, of the Shaanxi Meineng Clean EnergyLtd stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Shaanxi Meineng Clean EnergyLtd (at least 1 which is a bit concerning) , and understanding them should be part of your investment process.

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.