Key Insights

• Insiders appear to have a vested interest in Nantong Xingqiu GraphiteLtd's growth, as seen by their sizeable ownership
• Yi Zhang owns 53% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Nantong Xingqiu Graphite Co.,Ltd. (SHSE:688633) should be aware of the most powerful shareholder groups. With 70% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, insiders endured the biggest losses as the stock fell by 14%.

In the chart below, we zoom in on the different ownership groups of Nantong Xingqiu GraphiteLtd.

What Does The Institutional Ownership Tell Us About Nantong Xingqiu GraphiteLtd?

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.

We can see that Nantong Xingqiu GraphiteLtd 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 Nantong Xingqiu GraphiteLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Nantong Xingqiu GraphiteLtd. Yi Zhang is currently the company's largest shareholder with 53% of shares outstanding. This implies that they have majority interest control of the future of the company. With 12% and 3.1% of the shares outstanding respectively, Shujuan Qian and Penghua Fund Management Co., Ltd. are the second and third largest shareholders. Additionally, the company's CEO Jianjun Sun directly holds 0.8% of the total shares outstanding.

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

Insider Ownership Of Nantong Xingqiu GraphiteLtd

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 information suggests that insiders own more than half of Nantong Xingqiu Graphite Co.,Ltd.. This gives them effective control of the company. Given it has a market cap of CN¥2.2b, that means they have CN¥1.6b worth of shares. 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 18% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Nantong Xingqiu GraphiteLtd. 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:

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 3 warning signs with Nantong Xingqiu GraphiteLtd (at least 2 which don't sit too well with us) , and understanding them should be part of your investment process.

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.