Key Insights

• Insiders appear to have a vested interest in WuXi Xinje ElectricLtd's growth, as seen by their sizeable ownership
• 52% of the business is held by the top 5 shareholders
• 24% of WuXi Xinje ElectricLtd is held by Institutions

Every investor in WuXi Xinje Electric Co.,Ltd. (SHSE:603416) should be aware of the most powerful shareholder groups. With 51% 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 following last week's 8.0% decline in share price, insiders suffered the most losses.

In the chart below, we zoom in on the different ownership groups of WuXi Xinje ElectricLtd.

See our latest analysis for WuXi Xinje ElectricLtd

What Does The Institutional Ownership Tell Us About WuXi Xinje ElectricLtd?

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 WuXi Xinje 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at WuXi Xinje ElectricLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in WuXi Xinje ElectricLtd. The company's CEO Xin Li is the largest shareholder with 23% of shares outstanding. With 12% and 11% of the shares outstanding respectively, Tingli Liu and Jun Yu Zou are the second and third largest shareholders. Interestingly, the third-largest shareholder, Jun Yu Zou is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

On looking further, we found that 52% 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.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of WuXi Xinje ElectricLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 most recent data indicates that insiders own the majority of WuXi Xinje Electric Co.,Ltd.. This means they can collectively make decisions for the company. That means they own CN¥2.2b worth of shares in the CN¥4.3b company. That's quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. 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 26% stake in WuXi Xinje ElectricLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.