Key Insights

• The considerable ownership by private companies in Hengdian Group DMEGC Magnetics Ltd indicates that they collectively have a greater say in management and business strategy
• Hengdian Association of economic enterprises owns 51% of the company
• Institutional ownership in Hengdian Group DMEGC Magnetics Ltd is 12%

A look at the shareholders of Hengdian Group DMEGC Magnetics Co. ,Ltd (SZSE:002056) can tell us which group is most powerful. The group holding the most number of shares in the company, around 52% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Individual investors, on the other hand, account for 32% of the company's stockholders.

In the chart below, we zoom in on the different ownership groups of Hengdian Group DMEGC Magnetics Ltd.

What Does The Institutional Ownership Tell Us About Hengdian Group DMEGC Magnetics Ltd?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Hengdian Group DMEGC Magnetics Ltd. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Hengdian Group DMEGC Magnetics Ltd, (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 Hengdian Group DMEGC Magnetics Ltd. The company's largest shareholder is Hengdian Association of economic enterprises, with ownership of 51%. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 4.0% of the shares outstanding, followed by an ownership of 1.8% by the third-largest shareholder.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Hengdian Group DMEGC Magnetics Ltd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

We can see that insiders own shares in Hengdian Group DMEGC Magnetics Co. ,Ltd. This is a big company, so it is good to see this level of alignment. Insiders own CN¥518m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

With a 32% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Hengdian Group DMEGC Magnetics Ltd. 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 52%, of the Hengdian Group DMEGC Magnetics Ltd stock. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Hengdian Group DMEGC Magnetics Ltd better, we need to consider many other factors. Be aware that Hengdian Group DMEGC Magnetics Ltd is showing 1 warning sign in our investment analysis , you should know about...

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.