Both private companies who control a good portion of Shandong Weigao Group Medical Polymer Company Limited (HKG:1066) along with institutions must be dismayed after last week's 4.2% decrease

Key Insights

• Significant control over Shandong Weigao Group Medical Polymer by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 2 shareholders own 51% of the company
• Institutions own 30% of Shandong Weigao Group Medical Polymer

If you want to know who really controls Shandong Weigao Group Medical Polymer Company Limited (HKG:1066), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private companies with 46% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of private companies took a hit after last week’s 4.2% price drop, institutions with their 30% holdings also suffered.

In the chart below, we zoom in on the different ownership groups of Shandong Weigao Group Medical Polymer.

See our latest analysis for Shandong Weigao Group Medical Polymer

What Does The Institutional Ownership Tell Us About Shandong Weigao Group Medical Polymer?

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.

As you can see, institutional investors have a fair amount of stake in Shandong Weigao Group Medical Polymer. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Shandong Weigao Group Medical Polymer, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Shandong Weigao Group Medical Polymer. Weihai Weigao International Medical Investment Holdings Limited is currently the company's largest shareholder with 46% of shares outstanding. With 4.9% and 3.2% of the shares outstanding respectively, Wellington Management Group LLP and Norges Bank Investment Management are the second and third largest shareholders.

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.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Shandong Weigao Group Medical Polymer

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 data suggests that insiders own under 1% of Shandong Weigao Group Medical Polymer Company Limited in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around HK$39m worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 24% stake in the company, and hence can't easily be ignored. 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

Our data indicates that Private Companies hold 46%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shandong Weigao Group Medical Polymer better, we need to consider many other factors. Be aware that Shandong Weigao Group Medical Polymer is showing 1 warning sign in our investment analysis , you should know about...

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.