Key Insights

• Significant insider control over Jiangsu Lihua Animal Husbandry implies vested interests in company growth
• 52% of the business is held by the top 2 shareholders
• Institutional ownership in Jiangsu Lihua Animal Husbandry is 14%

Every investor in Jiangsu Lihua Animal Husbandry Co., Ltd. (SZSE:300761) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 36% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week's 5.2% gain.

Let's delve deeper into each type of owner of Jiangsu Lihua Animal Husbandry, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Jiangsu Lihua Animal Husbandry?

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.

Jiangsu Lihua Animal Husbandry already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Jiangsu Lihua Animal Husbandry, (below). Of course, keep in mind that there are other factors to consider, too.

Jiangsu Lihua Animal Husbandry is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Cheng Lili with 33% of shares outstanding. With 19% and 9.2% of the shares outstanding respectively, Changzhou Benteng Animal Husbandry Technical Service Center (Limited Partnership) and Changzhou Tianming Agricultural Technology Service Center (Limited Partnership) are the second and third largest shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Jiangsu Lihua Animal Husbandry

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.

It seems insiders own a significant proportion of Jiangsu Lihua Animal Husbandry Co., Ltd.. Insiders own CN¥7.3b worth of shares in the CN¥20b company. That's quite meaningful. 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

With a 17% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Jiangsu Lihua Animal Husbandry. 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.

Private Company Ownership

We can see that Private Companies own 33%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Jiangsu Lihua Animal Husbandry , and understanding them should be part of your investment process.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.