Key Insights

• Insiders appear to have a vested interest in Guangdong Lingxiao Pump IndustryLtd's growth, as seen by their sizeable ownership
• The top 3 shareholders own 53% of the company
• Institutional ownership in Guangdong Lingxiao Pump IndustryLtd is 19%

Every investor in Guangdong Lingxiao Pump Industry Co.,Ltd. (SZSE:002884) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 51% 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, insiders were the biggest beneficiaries of last week's 11% gain.

In the chart below, we zoom in on the different ownership groups of Guangdong Lingxiao Pump IndustryLtd.

What Does The Institutional Ownership Tell Us About Guangdong Lingxiao Pump IndustryLtd?

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 Guangdong Lingxiao Pump IndustryLtd. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Guangdong Lingxiao Pump IndustryLtd's earnings history below. Of course, the future is what really matters.

Guangdong Lingxiao Pump IndustryLtd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Hai Bo Wang with 30% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 17% and 6.8%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Guangdong Lingxiao Pump IndustryLtd

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems that insiders own more than half the Guangdong Lingxiao Pump Industry Co.,Ltd. stock. This gives them a lot of power. Given it has a market cap of CN¥6.3b, that means they have CN¥3.2b worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 30% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Guangdong Lingxiao Pump IndustryLtd. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Guangdong Lingxiao Pump IndustryLtd better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Guangdong Lingxiao Pump IndustryLtd you should know about.

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.