Key Insights

• Significant insider control over Changzhou Wujin Zhongrui Electronic Technology implies vested interests in company growth
• 50% of the company is held by a single shareholder (Xuexin Yang)
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Changzhou Wujin Zhongrui Electronic Technology Co., Ltd. (SZSE:301587) should be aware of the most powerful shareholder groups. With 50% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 11% decline in share price, insiders suffered the most losses.

Let's delve deeper into each type of owner of Changzhou Wujin Zhongrui Electronic Technology, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Changzhou Wujin Zhongrui Electronic Technology?

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 Changzhou Wujin Zhongrui Electronic Technology. 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. 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 Changzhou Wujin Zhongrui Electronic Technology's earnings history below. Of course, the future is what really matters.

Changzhou Wujin Zhongrui Electronic Technology is not owned by hedge funds. Our data suggests that Xuexin Yang, who is also the company's Senior Key Executive, holds the most number of shares at 50%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. In comparison, the second and third largest shareholders hold about 4.4% and 2.4% of the stock.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Changzhou Wujin Zhongrui Electronic Technology

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 information suggests that insiders own more than half of Changzhou Wujin Zhongrui Electronic Technology Co., Ltd.. This gives them effective control of the company. So they have a CN¥1.8b stake in this CN¥3.6b business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 33% stake in the company, and hence can't easily be ignored. 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

Our data indicates that Private Companies hold 6.0%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Changzhou Wujin Zhongrui Electronic Technology you should know about.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.