Key Insights

• Shanghai Guao Electronic Technology's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 44% of the business is held by the top 25 shareholders
• Insider ownership in Shanghai Guao Electronic Technology is 32%

Every investor in Shanghai Guao Electronic Technology Co., Ltd. (SZSE:300551) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 56% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of individual investors took a hit after last week's 8.1% price drop, insiders with their 32% also suffered.

In the chart below, we zoom in on the different ownership groups of Shanghai Guao Electronic Technology.

What Does The Institutional Ownership Tell Us About Shanghai Guao Electronic Technology?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Shanghai Guao Electronic Technology already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Shanghai Guao Electronic Technology's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Shanghai Guao Electronic Technology. The company's largest shareholder is Chong Jun Chen, with ownership of 24%. For context, the second largest shareholder holds about 1.9% of the shares outstanding, followed by an ownership of 1.7% by the third-largest shareholder.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. 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 Shanghai Guao Electronic Technology

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 most recent data indicates that insiders own a reasonable proportion of Shanghai Guao Electronic Technology Co., Ltd.. It has a market capitalization of just CN¥5.0b, and insiders have CN¥1.6b worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 56% stake in Shanghai Guao Electronic Technology, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

It seems that Private Companies own 4.4%, of the Shanghai Guao Electronic Technology stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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. For instance, we've identified 2 warning signs for Shanghai Guao Electronic Technology 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.