Key Insights

• Significant insider control over Stanley Agriculture GroupLtd implies vested interests in company growth
• A total of 5 investors have a majority stake in the company with 51% ownership
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

Every investor in Stanley Agriculture Group Co.,Ltd. (SZSE:002588) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 60% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥382m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Stanley Agriculture GroupLtd.

What Does The Institutional Ownership Tell Us About Stanley Agriculture GroupLtd?

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.

As you can see, institutional investors have a fair amount of stake in Stanley Agriculture GroupLtd. 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. 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 Stanley Agriculture GroupLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Stanley Agriculture GroupLtd. Our data shows that Wen Ban Gao is the largest shareholder with 23% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 15% and 4.6%, of the shares outstanding, respectively. Jin Hua Gao, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Stanley Agriculture GroupLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 the majority of Stanley Agriculture Group Co.,Ltd.. This means they can collectively make decisions for the company. Given it has a market cap of CN¥8.6b, that means insiders have a whopping CN¥5.1b worth of shares in their own names. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

With a 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Stanley Agriculture GroupLtd. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Stanley Agriculture GroupLtd you should be aware of, and 1 of them shouldn't be ignored.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com