Key Insights

• Significant control over HuBei NengTer TechnologyLtd by individual investors implies that the general public has more power to influence management and governance-related decisions
• 45% of the business is held by the top 19 shareholders
• 20% of HuBei NengTer TechnologyLtd is held by insiders

Every investor in HuBei NengTer Technology CO.,Ltd (SZSE:002102) should be aware of the most powerful shareholder groups. With 55% stake, individual investors 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.

Clearly, individual investors benefitted the most after the company's market cap rose by CN¥527m last week.

Let's take a closer look to see what the different types of shareholders can tell us about HuBei NengTer TechnologyLtd.

What Does The Lack Of Institutional Ownership Tell Us About HuBei NengTer TechnologyLtd?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

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. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. HuBei NengTer TechnologyLtd'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.

HuBei NengTer TechnologyLtd is not owned by hedge funds. Jingzhou City Development Holding Group Co., Ltd. is currently the company's largest shareholder with 13% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.8% and 6.8% of the stock. Note that the second and third-largest shareholders are also Top Key Executive and Vice Chairman, respectively, meaning that the company's top shareholders are insiders.

Our studies suggest that the top 19 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of HuBei NengTer TechnologyLtd

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. 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 most recent data indicates that insiders own a reasonable proportion of HuBei NengTer Technology CO.,Ltd. Insiders have a CN¥1.4b stake in this CN¥6.8b 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 -- including retail investors -- own 55% of HuBei NengTer TechnologyLtd. 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

It seems that Private Companies own 25%, of the HuBei NengTer 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:

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. To that end, you should be aware of the 2 warning signs we've spotted with HuBei NengTer TechnologyLtd .

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com