Key Insights

• The considerable ownership by private companies in AVIC Airborne Systems indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is Aviation Industry Corporation of China,Ltd. with a 52% stake
• Institutions own 11% of AVIC Airborne Systems

Every investor in AVIC Airborne Systems Co., Ltd. (SHSE:600372) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private companies with 53% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Individual investors, on the other hand, account for 35% of the company's stockholders.

In the chart below, we zoom in on the different ownership groups of AVIC Airborne Systems.

What Does The Institutional Ownership Tell Us About AVIC Airborne Systems?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that AVIC Airborne Systems does have institutional investors; and they hold a good portion of the company's stock. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see AVIC Airborne Systems' historic earnings and revenue below, but keep in mind there's always more to the story.

AVIC Airborne Systems is not owned by hedge funds. Aviation Industry Corporation of China,Ltd. is currently the largest shareholder, with 52% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. In comparison, the second and third largest shareholders hold about 2.0% and 1.5% of the stock.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of AVIC Airborne Systems

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that AVIC Airborne Systems Co., Ltd. insiders own under 1% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own CN¥664k of stock. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 35% ownership, the general public, mostly comprising of individual investors, have some degree of sway over AVIC Airborne Systems. 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 53%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.