Key Insights

• The considerable ownership by private companies in BOMESC Offshore Engineering indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 5 shareholders
• Institutions own 12% of BOMESC Offshore Engineering

A look at the shareholders of BOMESC Offshore Engineering Company Limited (SHSE:603727) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 48% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, private companies as a group endured the highest losses last week after market cap fell by CN¥507m.

In the chart below, we zoom in on the different ownership groups of BOMESC Offshore Engineering.

What Does The Institutional Ownership Tell Us About BOMESC Offshore Engineering?

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.

We can see that BOMESC Offshore Engineering does have institutional investors; and they hold a good portion of the company's stock. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see BOMESC Offshore Engineering's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in BOMESC Offshore Engineering. Tianjin Bomesc Investement Holdings Co., Ltd. is currently the largest shareholder, with 29% of shares outstanding. In comparison, the second and third largest shareholders hold about 13% and 3.6% of the stock.

Our research also brought to light the fact that roughly 50% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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 BOMESC Offshore Engineering

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 most recent data indicates that insiders own less than 1% of BOMESC Offshore Engineering Company Limited. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It seems the board members have no more than CN¥14k worth of shares in the CN¥2.9b company. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

With a 41% ownership, the general public, mostly comprising of individual investors, have some degree of sway over BOMESC Offshore Engineering. 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

Our data indicates that Private Companies hold 48%, 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 BOMESC Offshore Engineering better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with BOMESC Offshore Engineering .

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.