Key Insights

• Insiders appear to have a vested interest in Chengdu Bright Eye Hospital's growth, as seen by their sizeable ownership
• A total of 3 investors have a majority stake in the company with 50% ownership
• Institutions own 26% of Chengdu Bright Eye Hospital

A look at the shareholders of Chengdu Bright Eye Hospital Co., Ltd. (SZSE:301239) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 44% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, insiders endured the biggest losses as the stock fell by 8.9%.

Let's delve deeper into each type of owner of Chengdu Bright Eye Hospital, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Chengdu Bright Eye Hospital?

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.

We can see that Chengdu Bright Eye Hospital 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 Chengdu Bright Eye Hospital'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 Chengdu Bright Eye Hospital. Xuyang Xu is currently the largest shareholder, with 43% of shares outstanding. In comparison, the second and third largest shareholders hold about 4.0% and 3.4% of the stock.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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

Insider Ownership Of Chengdu Bright Eye Hospital

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.

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.

It seems insiders own a significant proportion of Chengdu Bright Eye Hospital Co., Ltd.. It is very interesting to see that insiders have a meaningful CN¥3.4b stake in this CN¥7.7b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 21% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Chengdu Bright Eye Hospital. 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 8.8%, 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 access this interactive graph of past earnings, revenue and cash flow, for free.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.