Key Insights

• Edifier Technology's significant insider ownership suggests inherent interests in company's expansion
• The top 3 shareholders own 52% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Edifier Technology Co., Ltd. (SZSE:002351) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 57% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

So it follows, every decision made by insiders of Edifier Technology regarding the company's future would be crucial to them.

Let's delve deeper into each type of owner of Edifier Technology, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Edifier Technology?

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.

As you can see, institutional investors have a fair amount of stake in Edifier Technology. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Edifier Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Edifier Technology. The company's CEO Wen Dong Zhang is the largest shareholder with 27% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 21% and 3.8%, of the shares outstanding, respectively. Note that two of the top three shareholders are also Senior Key Executive and Member of the Board of Directors, respectively, once again pointing to significant ownership by company insiders.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Edifier Technology

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

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 insiders own more than half of Edifier Technology Co., Ltd.. This gives them effective control of the company. Insiders own CN¥9.1b worth of shares in the CN¥16b company. That's extraordinary! 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 36% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Edifier Technology. 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 Edifier Technology better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Edifier Technology you should know about.

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.