China MeiDong Auto Holdings Limited's (HKG:1268) most bullish insider, Top Key Executive Fan Ye must be pleased with the recent 15% gain

Key Insights

• China MeiDong Auto Holdings' significant insider ownership suggests inherent interests in company's expansion
• The largest shareholder of the company is Fan Ye with a 52% stake
• 29% of China MeiDong Auto Holdings is held by Institutions

If you want to know who really controls China MeiDong Auto Holdings Limited (HKG:1268), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 53% to be precise, is individual insiders. 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 HK$3.3b market cap following a 15% gain in the stock.

Let's delve deeper into each type of owner of China MeiDong Auto Holdings, beginning with the chart below.

View our latest analysis for China MeiDong Auto Holdings

What Does The Institutional Ownership Tell Us About China MeiDong Auto Holdings?

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.

We can see that China MeiDong Auto Holdings does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 China MeiDong Auto Holdings' earnings history below. Of course, the future is what really matters.

Our data indicates that hedge funds own 5.2% of China MeiDong Auto Holdings. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In China MeiDong Auto Holdings' case, its Top Key Executive, Fan Ye, is the largest shareholder, holding 52% of shares outstanding. With 16% and 5.2% of the shares outstanding respectively, Fidelity International Ltd and Aikya Investment Management Limited are the second and third largest shareholders.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of China MeiDong Auto Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems that insiders own more than half the China MeiDong Auto Holdings Limited stock. This gives them a lot of power. Given it has a market cap of HK$3.3b, that means they have HK$1.7b worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 13% stake in China MeiDong Auto Holdings. 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:

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. To that end, you should be aware of the 3 warning signs we've spotted with China MeiDong Auto Holdings .

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.