Key Insights

• Yangling Metron New Material's significant insider ownership suggests inherent interests in company's expansion
• The top 2 shareholders own 62% of the company
• Institutional ownership in Yangling Metron New Material is 12%

To get a sense of who is truly in control of Yangling Metron New Material Inc. (SZSE:300861), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 68% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit CN¥14b market cap following a 3.9% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Yangling Metron New Material.

What Does The Institutional Ownership Tell Us About Yangling Metron New Material?

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.

Yangling Metron New Material already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Yangling Metron New Material's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Yangling Metron New Material. The company's largest shareholder is Ying Wu, with ownership of 50%. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 6.1% by the third-largest shareholder. Haibo Jia, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

To make our study more interesting, we found that the top 2 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Yangling Metron New Material

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.

It seems that insiders own more than half the Yangling Metron New Material Inc. stock. This gives them a lot of power. Given it has a market cap of CN¥14b, that means insiders have a whopping CN¥9.5b worth of shares in their own names. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

With a 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Yangling Metron New Material. 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:

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 2 warning signs for Yangling Metron New Material (1 is significant) that you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.