Jie Xiao YSX Tech. Co., Ltd's (NASDAQ:YSXT) CEO is the most bullish insider, and their stock value gained 19%last week

Key Insights

• YSX Tech's significant insider ownership suggests inherent interests in company's expansion
• Jie Xiao owns 54% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

We've discovered 2 warning signs about YSX Tech. View them for free.

If you want to know who really controls YSX Tech. Co., Ltd (NASDAQ:YSXT), then you'll have to look at the makeup of its share registry. With 62% 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 US$113m market cap following a 19% gain in the stock.

In the chart below, we zoom in on the different ownership groups of YSX Tech.

View our latest analysis for YSX Tech

What Does The Lack Of Institutional Ownership Tell Us About YSX Tech?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of YSX Tech, for yourself, below.

We note that hedge funds don't have a meaningful investment in YSX Tech. Looking at our data, we can see that the largest shareholder is the CEO Jie Xiao with 54% of shares outstanding. With such a huge stake, we infer that they have significant control of the future of the company. It's 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 with such skin in the game. With 4.0% and 3.7% of the shares outstanding respectively, Weiqiang Zheng and Geran Xiao are the second and third largest shareholders.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 YSX Tech

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

Our most recent data indicates that insiders own the majority of YSX Tech. Co., Ltd. This means they can collectively make decisions for the company. So they have a US$70m stake in this US$113m business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 38% stake in YSX Tech. 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 YSX Tech better, we need to consider many other factors. For instance, we've identified 2 warning signs for YSX Tech (1 doesn't sit too well with us) that you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.