Key Insights

• Everdisplay Optronics (Shanghai)'s significant private equity firms ownership suggests that the key decisions are influenced by shareholders from the larger public
• The largest shareholder of the company is Shanghai Alliance Investment Ltd. with a 58% stake
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

A look at the shareholders of Everdisplay Optronics (Shanghai) Co., Ltd. (SHSE:688538) can tell us which group is most powerful. The group holding the most number of shares in the company, around 69% to be precise, is private equity firms. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And individual investors on the other hand have a 18% ownership in the company.

In the chart below, we zoom in on the different ownership groups of Everdisplay Optronics (Shanghai).

What Does The Institutional Ownership Tell Us About Everdisplay Optronics (Shanghai)?

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.

As you can see, institutional investors have a fair amount of stake in Everdisplay Optronics (Shanghai). 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 Everdisplay Optronics (Shanghai)'s historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Everdisplay Optronics (Shanghai). Our data shows that Shanghai Alliance Investment Ltd. is the largest shareholder with 58% of shares outstanding. This implies that they have majority interest control of the future of the company. Shanghai Integrated Circuit Industry Investment Fund Management Co., Ltd. is the second largest shareholder owning 11% of common stock, and Shanghai Xinjinshan Industrial Investment Development Co.,Ltd. holds about 3.1% of the company stock.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Everdisplay Optronics (Shanghai)

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 less than 1% of Everdisplay Optronics (Shanghai) Co., Ltd.. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around CN¥14m worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 18% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With a stake of 69%, private equity firms could influence the Everdisplay Optronics (Shanghai) board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

Our data indicates that Private Companies hold 4.0%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 2 warning signs for Everdisplay Optronics (Shanghai) that you should be aware of before investing here.

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.