Key Insights

• The considerable ownership by private companies in Tianjin Guoan Mengguli New Materials Science & Technology indicates that they collectively have a greater say in management and business strategy
• The top 5 shareholders own 52% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Tianjin Guoan Mengguli New Materials Science & Technology Co., Ltd. (SZSE:301487) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private companies with 53% 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, private companies as a group endured the highest losses last week after market cap fell by CN¥676m.

In the chart below, we zoom in on the different ownership groups of Tianjin Guoan Mengguli New Materials Science & Technology.

What Does The Lack Of Institutional Ownership Tell Us About Tianjin Guoan Mengguli New Materials Science & Technology?

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 are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Tianjin Guoan Mengguli New Materials Science & Technology'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.

Tianjin Guoan Mengguli New Materials Science & Technology is not owned by hedge funds. The company's largest shareholder is Hengtong Group Co.,Ltd, with ownership of 34%. In comparison, the second and third largest shareholders hold about 5.7% and 5.4% of the stock.

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 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 Tianjin Guoan Mengguli New Materials Science & Technology

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. 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.

We can see that insiders own shares in Tianjin Guoan Mengguli New Materials Science & Technology Co., Ltd.. This is a big company, so it is good to see this level of alignment. Insiders own CN¥887m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

With a 35% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Tianjin Guoan Mengguli New Materials Science & Technology. 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 Equity Ownership

With an ownership of 5.4%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

Our data indicates that Private Companies hold 53%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 2 warning signs for Tianjin Guoan Mengguli New Materials Science & Technology 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.