Key Insights
- Insiders appear to have a vested interest in Shenzhen Fortune Trend technology's growth, as seen by their sizeable ownership
- Shan Huang owns 68% of the company
- Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
A look at the shareholders of Shenzhen Fortune Trend technology Co., Ltd. (SHSE:688318) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 71% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
And following last week's 3.8% 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 Shenzhen Fortune Trend technology.
What Does The Institutional Ownership Tell Us About Shenzhen Fortune Trend technology?
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.
As you can see, institutional investors have a fair amount of stake in Shenzhen Fortune Trend technology. 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 Shenzhen Fortune Trend technology, (below). Of course, keep in mind that there are other factors to consider, too.
Shenzhen Fortune Trend technology is not owned by hedge funds. The company's CEO Shan Huang is the largest shareholder with 68% of shares outstanding. With such a huge stake, we infer that they have significant control of the future of the company. It's usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider with such skin in the game. GF Fund Management Co., Ltd. is the second largest shareholder owning 1.0% of common stock, and Qing Huang holds about 0.8% of the company stock. Interestingly, the third-largest shareholder, Qing Huang is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.
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 is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of Shenzhen Fortune Trend technology
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.
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 information suggests that insiders own more than half of Shenzhen Fortune Trend technology Co., Ltd.. This gives them effective control of the company. Given it has a market cap of CN¥15b, that means insiders have a whopping CN¥11b worth of shares in their own names. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 24% stake in Shenzhen Fortune Trend technology. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
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. Take risks for example - Shenzhen Fortune Trend technology has 1 warning sign we think you should be aware of.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com