Key Insights

• The considerable ownership by retail investors in Hunan Yujing MachineryLtd indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 5 shareholders
• Insider ownership in Hunan Yujing MachineryLtd is 43%

A look at the shareholders of Hunan Yujing Machinery Co.,Ltd (SZSE:002943) can tell us which group is most powerful. The group holding the most number of shares in the company, around 45% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While retail investors were the group that reaped the most benefits after last week's 8.7% price gain, insiders also received a 43% cut.

Let's take a closer look to see what the different types of shareholders can tell us about Hunan Yujing MachineryLtd.

What Does The Institutional Ownership Tell Us About Hunan Yujing MachineryLtd?

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 Hunan Yujing MachineryLtd. 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. 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 Hunan Yujing MachineryLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Hunan Yujing MachineryLtd is not owned by hedge funds. Yuhong Yang is currently the largest shareholder, with 23% of shares outstanding. With 17% and 7.0% of the shares outstanding respectively, Jiayu Yang and Hangzhou Queshi Private Fund Management Co., Ltd. are the second and third largest shareholders. Jiayu Yang, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

Our research also brought to light the fact that roughly 50% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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. 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 Hunan Yujing MachineryLtd

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.

Our most recent data indicates that insiders own a reasonable proportion of Hunan Yujing Machinery Co.,Ltd. It has a market capitalization of just CN¥4.5b, and insiders have CN¥2.0b worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 45% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 4 warning signs for Hunan Yujing MachineryLtd (2 make us uncomfortable!) that you should be aware of before investing here.

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.