Key Insights

• Jiangsu Lihua Animal Husbandry's significant insider ownership suggests inherent interests in company's expansion
• The top 2 shareholders own 52% of the company
• 11% of Jiangsu Lihua Animal Husbandry is held by Institutions

If you want to know who really controls Jiangsu Lihua Animal Husbandry Co., Ltd. (SZSE:300761), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 36% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 4.4% decline in share price, insiders suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Jiangsu Lihua Animal Husbandry.

What Does The Institutional Ownership Tell Us About Jiangsu Lihua Animal Husbandry?

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.

As you can see, institutional investors have a fair amount of stake in Jiangsu Lihua Animal Husbandry. 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 Jiangsu Lihua Animal Husbandry's historic earnings and revenue below, but keep in mind there's always more to the story.

Jiangsu Lihua Animal Husbandry is not owned by hedge funds. The company's CEO Cheng Lili is the largest shareholder with 33% of shares outstanding. In comparison, the second and third largest shareholders hold about 19% and 9.2% of the stock.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence 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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Jiangsu Lihua Animal Husbandry

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. 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.

Our most recent data indicates that insiders own a reasonable proportion of Jiangsu Lihua Animal Husbandry Co., Ltd.. Insiders own CN¥5.8b worth of shares in the CN¥16b 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 20% stake in Jiangsu Lihua Animal Husbandry. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 33%, 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 Jiangsu Lihua Animal Husbandry better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Jiangsu Lihua Animal Husbandry .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.