Key Insights

• The considerable ownership by retail investors in Jiangsu Rutong Petro-Machinery indicates that they collectively have a greater say in management and business strategy
• A total of 24 investors have a majority stake in the company with 43% ownership
• Insiders own 32% of Jiangsu Rutong Petro-Machinery

Every investor in Jiangsu Rutong Petro-Machinery Co., Ltd (SHSE:603036) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 57% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While insiders who own 32% came under pressure after market cap dropped to CN¥3.3b last week,retail investors took the most losses.

Let's delve deeper into each type of owner of Jiangsu Rutong Petro-Machinery, beginning with the chart below.

What Does The Lack Of Institutional Ownership Tell Us About Jiangsu Rutong Petro-Machinery?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. Jiangsu Rutong Petro-Machinery's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Jiangsu Rutong Petro-Machinery is not owned by hedge funds. Our data shows that Jiangxi Hanyi Technology Co., Ltd. is the largest shareholder with 12% of shares outstanding. With 11% and 3.8% of the shares outstanding respectively, Cai Hong Cao and Bo Bing Xu are the second and third largest shareholders. Bo Bing Xu, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

On studying our ownership data, we found that 24 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Jiangsu Rutong Petro-Machinery

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Jiangsu Rutong Petro-Machinery Co., Ltd. Insiders have a CN¥1.1b stake in this CN¥3.3b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 57% stake in Jiangsu Rutong Petro-Machinery, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Company Ownership

Our data indicates that Private Companies hold 12%, 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. For instance, we've identified 1 warning sign for Jiangsu Rutong Petro-Machinery that you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.