Key Insights

• Significant insider control over Colorlight Cloud Tech implies vested interests in company growth
• 52% of the business is held by the top 2 shareholders
• Institutions own 21% of Colorlight Cloud Tech

A look at the shareholders of Colorlight Cloud Tech Ltd (SZSE:301391) can tell us which group is most powerful. With 61% 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.

As a result, insiders were the biggest beneficiaries of last week's 9.7% gain.

Let's delve deeper into each type of owner of Colorlight Cloud Tech, beginning with the chart below.

See our latest analysis for Colorlight Cloud Tech

What Does The Institutional Ownership Tell Us About Colorlight Cloud Tech?

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.

Colorlight Cloud Tech already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Colorlight Cloud Tech's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Colorlight Cloud Tech. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Colorlight Cloud Tech's case, its Senior Key Executive, Jinzhi Zhou, is the largest shareholder, holding 43% of shares outstanding. The second and third largest shareholders are Lingling Deng and Zhimin He, with an equal amount of shares to their name at 9.2%. Interestingly, the third-largest shareholder, Zhimin He is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Colorlight Cloud Tech

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.

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.

Our most recent data indicates that insiders own the majority of Colorlight Cloud Tech Ltd. This means they can collectively make decisions for the company. Given it has a market cap of CN¥7.1b, that means they have CN¥4.4b worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 12% stake in the company, and hence can't easily be ignored. 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

It seems that Private Companies own 4.6%, of the Colorlight Cloud Tech stock. 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:

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. Case in point: We've spotted 2 warning signs for Colorlight Cloud Tech you should be aware of, and 1 of them shouldn't be ignored.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.