Key Insights

• Insiders appear to have a vested interest in Shaanxi Lighte Optoelectronics MaterialLtd's growth, as seen by their sizeable ownership
• A total of 2 investors have a majority stake in the company with 56% ownership
• 26% of Shaanxi Lighte Optoelectronics MaterialLtd is held by Institutions

A look at the shareholders of Shaanxi Lighte Optoelectronics Material Co.,Ltd (SHSE:688150) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 50% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit CN¥6.8b market cap following a 7.9% gain in the stock.

Let's delve deeper into each type of owner of Shaanxi Lighte Optoelectronics MaterialLtd, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Shaanxi Lighte Optoelectronics MaterialLtd?

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.

Shaanxi Lighte Optoelectronics MaterialLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Shaanxi Lighte Optoelectronics MaterialLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Shaanxi Lighte Optoelectronics MaterialLtd is not owned by hedge funds. With a 50% stake, CEO Yalong Wang is the largest shareholder. Meanwhile, the second and third largest shareholders, hold 5.9% and 4.4%, of the shares outstanding, respectively.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 56% stake.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Shaanxi Lighte Optoelectronics MaterialLtd

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.

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.

Our most recent data indicates that insiders own a reasonable proportion of Shaanxi Lighte Optoelectronics Material Co.,Ltd. Insiders have a CN¥3.3b stake in this CN¥6.8b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 12% stake in Shaanxi Lighte Optoelectronics MaterialLtd. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Equity Ownership

With a stake of 5.9%, private equity firms could influence the Shaanxi Lighte Optoelectronics MaterialLtd board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

Our data indicates that Private Companies hold 6.1%, of the company's shares. 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:

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 1 warning sign we've spotted with Shaanxi Lighte Optoelectronics MaterialLtd .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.