Key Insights

• Insiders appear to have a vested interest in Zhejiang Tiantai Xianghe IndustrialLtd's growth, as seen by their sizeable ownership
• 53% of the business is held by the top 5 shareholders
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Zhejiang Tiantai Xianghe Industrial Co.,Ltd. (SHSE:603500) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 59% 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¥2.7b market cap following a 18% gain in the stock.

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

What Does The Institutional Ownership Tell Us About Zhejiang Tiantai Xianghe IndustrialLtd?

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.

Since institutions own only a small portion of Zhejiang Tiantai Xianghe IndustrialLtd, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Hedge funds don't have many shares in Zhejiang Tiantai Xianghe IndustrialLtd. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Zhejiang Tiantai Xianghe IndustrialLtd's case, its Top Key Executive, Youqian Tang, is the largest shareholder, holding 29% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.4% and 6.7%, of the shares outstanding, respectively. Interestingly, the second and third-largest shareholders also happen to be the Senior Key Executive and Member of the Board of Directors, respectively. This once again signifies considerable insider ownership amongst the company's top shareholders. Furthermore, CEO Xiao Tang is the owner of 6.7% of the company's shares.

After doing some more digging, we found that the top 5 shareholders control more than half of the company's shares which essentially means that there is concentrated ownership amongst the top shareholders, most of whom happen to be insiders!

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 Zhejiang Tiantai Xianghe IndustrialLtd

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.

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 the majority of Zhejiang Tiantai Xianghe Industrial Co.,Ltd.. This means they can collectively make decisions for the company. So they have a CN¥1.6b stake in this CN¥2.7b business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 35% stake in Zhejiang Tiantai Xianghe IndustrialLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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 3 warning signs for Zhejiang Tiantai Xianghe IndustrialLtd (1 shouldn't be ignored) that you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.