Key Insights

• Significant control over Anhui Truchum Advanced Materials and Technology by individual investors implies that the general public has more power to influence management and governance-related decisions
• 50% of the business is held by the top 10 shareholders
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Anhui Truchum Advanced Materials and Technology Co., Ltd. (SZSE:002171) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 46% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 3.5% decline in share price, individual investors suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Anhui Truchum Advanced Materials and Technology.

What Does The Institutional Ownership Tell Us About Anhui Truchum Advanced Materials and Technology?

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 Anhui Truchum Advanced Materials and Technology 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 Anhui Truchum Advanced Materials and Technology's earnings history below. Of course, the future is what really matters.

Anhui Truchum Advanced Materials and Technology is not owned by hedge funds. Anhui TRUCHUM Investment Group Co., Ltd. is currently the company's largest shareholder with 30% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.2% and 4.9% of the stock.

We did some more digging and found that 10 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Anhui Truchum Advanced Materials and Technology

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. 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.

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 some shares in Anhui Truchum Advanced Materials and Technology Co., Ltd.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around CN¥831m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

With a 46% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Anhui Truchum Advanced Materials and Technology. 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.

Private Equity Ownership

Private equity firms hold a 5.2% stake in Anhui Truchum Advanced Materials and Technology. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

Our data indicates that Private Companies hold 30%, of the company's shares. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 4 warning signs for Anhui Truchum Advanced Materials and Technology (2 are a bit concerning) 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.