Key Insights

• Insiders appear to have a vested interest in Suzhou West Deane New Power ElectricLtd's growth, as seen by their sizeable ownership
• 61% of the business is held by the top 2 shareholders
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of Suzhou West Deane New Power Electric Co.,Ltd. (SHSE:603312) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 61% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥464m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Suzhou West Deane New Power ElectricLtd.

What Does The Institutional Ownership Tell Us About Suzhou West Deane New Power ElectricLtd?

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 Suzhou West Deane New Power ElectricLtd does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Suzhou West Deane New Power ElectricLtd'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 Suzhou West Deane New Power ElectricLtd. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Suzhou West Deane New Power ElectricLtd's case, its Top Key Executive, JIAN SHENG, is the largest shareholder, holding 34% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 27% and 6.8%, of the shares outstanding, respectively. Interestingly, the second-largest shareholder, SHU PAN is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Suzhou West Deane New Power ElectricLtd

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 that insiders own more than half the Suzhou West Deane New Power Electric Co.,Ltd. stock. This gives them a lot of power. Given it has a market cap of CN¥4.5b, that means they have CN¥2.7b worth of shares. 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

The general public, who are usually individual investors, hold a 21% stake in Suzhou West Deane New Power ElectricLtd. 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 6.8%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Suzhou West Deane New Power ElectricLtd better, we need to consider many other factors. For instance, we've identified 3 warning signs for Suzhou West Deane New Power ElectricLtd (1 is a bit unpleasant) that you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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