Key Insights

• Insiders appear to have a vested interest in Sichuan Discovery Dream Science & TechnologyLtd's growth, as seen by their sizeable ownership
• A total of 2 investors have a majority stake in the company with 58% ownership
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

A look at the shareholders of Sichuan Discovery Dream Science & Technology Co.,Ltd (SZSE:301213) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 48% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit CN¥3.8b market cap following a 13% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Sichuan Discovery Dream Science & TechnologyLtd.

See our latest analysis for Sichuan Discovery Dream Science & TechnologyLtd

What Does The Institutional Ownership Tell Us About Sichuan Discovery Dream Science & TechnologyLtd?

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.

We can see that Sichuan Discovery Dream Science & TechnologyLtd 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. 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 Sichuan Discovery Dream Science & TechnologyLtd, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Sichuan Discovery Dream Science & TechnologyLtd. With a 42% stake, CEO Qiang Wei is the largest shareholder. With 15% and 2.7% of the shares outstanding respectively, Sichuan Discovery Dream Development Technology Partnership Enterprise (Limited Partnership) and Mingquan Yi are the second and third largest shareholders. Interestingly, the third-largest shareholder, Mingquan Yi is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

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.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Sichuan Discovery Dream Science & TechnologyLtd

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.

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.

Our information suggests that insiders maintain a significant holding in Sichuan Discovery Dream Science & Technology Co.,Ltd. Insiders have a CN¥1.8b stake in this CN¥3.8b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 30% stake in Sichuan Discovery Dream Science & TechnologyLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 15%, of the Sichuan Discovery Dream Science & TechnologyLtd stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Sichuan Discovery Dream Science & TechnologyLtd better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Sichuan Discovery Dream Science & TechnologyLtd (of which 2 make us uncomfortable!) you should know about.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.