Key Insights

• Leader Harmonious Drive Systems' significant insider ownership suggests inherent interests in company's expansion
• 51% of the business is held by the top 5 shareholders
• 26% of Leader Harmonious Drive Systems is held by Institutions

A look at the shareholders of Leader Harmonious Drive Systems Co., Ltd. (SHSE:688017) can tell us which group is most powerful. With 46% 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.

And last week, insiders endured the biggest losses as the stock fell by 4.2%.

In the chart below, we zoom in on the different ownership groups of Leader Harmonious Drive Systems.

What Does The Institutional Ownership Tell Us About Leader Harmonious Drive Systems?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Leader Harmonious Drive Systems. 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 Leader Harmonious Drive Systems, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Leader Harmonious Drive Systems. The company's largest shareholder is Jing Zuo, with ownership of 20%. With 20% and 4.8% of the shares outstanding respectively, Yuyu Zuo and SDIC Innovation Investment Management Co., Ltd. are the second and third largest shareholders.

On looking further, we found that 51% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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 Leader Harmonious Drive Systems

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

It seems insiders own a significant proportion of Leader Harmonious Drive Systems Co., Ltd.. It has a market capitalization of just CN¥12b, and insiders have CN¥5.5b worth of shares in their own names. That's quite significant. 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

With a 28% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Leader Harmonious Drive Systems. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Leader Harmonious Drive Systems better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Leader Harmonious Drive Systems , and understanding them should be part of your investment process.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com