Key Insights

• Insiders appear to have a vested interest in Zhejiang Yonggui Electric Equipment's growth, as seen by their sizeable ownership
• 51% of the business is held by the top 7 shareholders
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Zhejiang Yonggui Electric Equipment Co., Ltd. (SZSE:300351) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 45% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders were the biggest beneficiaries of last week's 8.8% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Zhejiang Yonggui Electric Equipment.

What Does The Institutional Ownership Tell Us About Zhejiang Yonggui Electric Equipment?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Zhejiang Yonggui Electric Equipment. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Zhejiang Yonggui Electric Equipment, (below). Of course, keep in mind that there are other factors to consider, too.

Zhejiang Yonggui Electric Equipment is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Yonggui Fan with 14% of shares outstanding. For context, the second largest shareholder holds about 8.1% of the shares outstanding, followed by an ownership of 7.8% by the third-largest shareholder. Note that the second and third-largest shareholders are also Chief Executive Officer and Chairman of the Board, respectively, meaning that the company's top shareholders are insiders.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Zhejiang Yonggui Electric Equipment

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 information suggests that insiders maintain a significant holding in Zhejiang Yonggui Electric Equipment Co., Ltd.. Insiders have a CN¥2.5b stake in this CN¥5.6b 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, who are usually individual investors, hold a 42% stake in Zhejiang Yonggui Electric Equipment. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 7.4%, of the Zhejiang Yonggui Electric Equipment 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Zhejiang Yonggui Electric Equipment , and understanding them should be part of your investment process.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.