Key Insights

• The considerable ownership by individual investors in Luoyang Xinqianglian Slewing Bearing indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 6 shareholders
• 36% of Luoyang Xinqianglian Slewing Bearing is held by insiders

A look at the shareholders of Luoyang Xinqianglian Slewing Bearing Co., Ltd. (SZSE:300850) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual investors with 39% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders, who own 36% shares weren't spared from last week's CN¥1.3b market cap drop, individual investors as a group suffered the maximum losses

Let's take a closer look to see what the different types of shareholders can tell us about Luoyang Xinqianglian Slewing Bearing.

What Does The Institutional Ownership Tell Us About Luoyang Xinqianglian Slewing Bearing?

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.

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

Luoyang Xinqianglian Slewing Bearing is not owned by hedge funds. Zhenqiang Xiao is currently the largest shareholder, with 19% of shares outstanding. For context, the second largest shareholder holds about 18% of the shares outstanding, followed by an ownership of 7.4% by the third-largest shareholder. Gaoqiang Xiao, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 Luoyang Xinqianglian Slewing Bearing

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.

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 information suggests that insiders maintain a significant holding in Luoyang Xinqianglian Slewing Bearing Co., Ltd.. Insiders own CN¥2.7b worth of shares in the CN¥7.4b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 39% stake in Luoyang Xinqianglian Slewing Bearing. 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 7.4%, private equity firms could influence the Luoyang Xinqianglian Slewing Bearing board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

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. Take risks for example - Luoyang Xinqianglian Slewing Bearing has 4 warning signs (and 2 which are significant) we think 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.