Key Insights

• Given the large stake in the stock by institutions, Guangdong Guanghong HoldingsLtd's stock price might be vulnerable to their trading decisions
• Guangdong Guanghong Asset Management Co. Ltd. owns 55% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

A look at the shareholders of Guangdong Guanghong Holdings Co.,Ltd. (SZSE:000529) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 57% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, institutional investors endured the highest losses last week after market cap fell by CN¥555m. This set of investors may especially be concerned about the current loss, which adds to a one-year loss of 24% for shareholders. Often called "market movers", institutions wield significant power in influencing the price dynamics of any stock. As a result, if the downtrend continues, institutions may face pressures to sell Guangdong Guanghong HoldingsLtd, which might have negative implications on individual investors.

Let's take a closer look to see what the different types of shareholders can tell us about Guangdong Guanghong HoldingsLtd.

See our latest analysis for Guangdong Guanghong HoldingsLtd

What Does The Institutional Ownership Tell Us About Guangdong Guanghong HoldingsLtd?

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.

Guangdong Guanghong HoldingsLtd 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. 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 Guangdong Guanghong HoldingsLtd's earnings history below. Of course, the future is what really matters.

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Hedge funds don't have many shares in Guangdong Guanghong HoldingsLtd. The company's largest shareholder is Guangdong Guanghong Asset Management Co. Ltd., with ownership of 55%. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 1.4% of the shares outstanding, followed by an ownership of 1.0% by the third-largest shareholder.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Guangdong Guanghong HoldingsLtd

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.

We note our data does not show any board members holding shares, personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Guangdong Guanghong HoldingsLtd. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Guangdong Guanghong HoldingsLtd better, we need to consider many other factors. Be aware that Guangdong Guanghong HoldingsLtd is showing 3 warning signs in our investment analysis , and 1 of those is a bit concerning...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.