Canggang Railway Limited (HKG:2169) Top Key Executive Yongliang Liu's holdings dropped 23% in value as a result of the recent pullback

Key Insights

• Canggang Railway's significant insider ownership suggests inherent interests in company's expansion
• Yongliang Liu owns 67% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Canggang Railway Limited (HKG:2169) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 70% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders as a group endured the highest losses after market cap fell by HK$1.3b.

Let's take a closer look to see what the different types of shareholders can tell us about Canggang Railway.

View our latest analysis for Canggang Railway

What Does The Institutional Ownership Tell Us About Canggang Railway?

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.

Canggang Railway already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Canggang Railway's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Canggang Railway. From our data, we infer that the largest shareholder is Yongliang Liu (who also holds the title of Top Key Executive) with 67% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. With 4.7% and 1.8% of the shares outstanding respectively, China Life AMP Asset Management Company Limited and Weiming Yi are the second and third largest shareholders. Interestingly, the third-largest shareholder, Weiming Yi is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Canggang Railway

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.

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.

Our information suggests that insiders own more than half of Canggang Railway Limited. This gives them effective control of the company. So they have a HK$3.1b stake in this HK$4.5b business. 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-- including retail investors -- own 22% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Canggang Railway better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Canggang Railway (including 1 which shouldn't be ignored) .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.