Key Insights

• Insiders appear to have a vested interest in Zhejiang Tony Electronic's growth, as seen by their sizeable ownership
• A total of 3 investors have a majority stake in the company with 54% ownership
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Zhejiang Tony Electronic Co., Ltd (SHSE:603595) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 55% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit CN¥4.4b market cap following a 10% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about Zhejiang Tony Electronic.

What Does The Institutional Ownership Tell Us About Zhejiang Tony Electronic?

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 Zhejiang Tony Electronic 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 Zhejiang Tony Electronic's earnings history below. Of course, the future is what really matters.

Zhejiang Tony Electronic is not owned by hedge funds. Xin Fang Shen is currently the largest shareholder, with 32% of shares outstanding. With 17% and 5.6% of the shares outstanding respectively, Xiao Yu Shen and Ying Zhang are the second and third largest shareholders. Xiao Yu Shen, 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 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Zhejiang Tony Electronic

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our most recent data indicates that insiders own the majority of Zhejiang Tony Electronic Co., Ltd. This means they can collectively make decisions for the company. Given it has a market cap of CN¥4.4b, that means they have CN¥2.4b worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 31% stake in Zhejiang Tony Electronic. 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

Our data indicates that Private Companies hold 4.2%, 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:

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 Zhejiang Tony Electronic you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.