Key Insights

• Insiders appear to have a vested interest in Sichuan Guoguang Agrochemical's growth, as seen by their sizeable ownership
• The top 6 shareholders own 52% of the company
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

Every investor in Sichuan Guoguang Agrochemical Co., Ltd. (SZSE:002749) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 63% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, insiders endured the biggest losses as the stock fell by 5.4%.

Let's take a closer look to see what the different types of shareholders can tell us about Sichuan Guoguang Agrochemical.

What Does The Institutional Ownership Tell Us About Sichuan Guoguang Agrochemical?

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.

Sichuan Guoguang Agrochemical already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Sichuan Guoguang Agrochemical's historic earnings and revenue below, but keep in mind there's always more to the story.

Sichuan Guoguang Agrochemical is not owned by hedge funds. The company's largest shareholder is Chang Xu Yan, with ownership of 34%. The second and third largest shareholders are Ya Qi Yan and Lixia Hu, with an equal amount of shares to their name at 4.4%.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Sichuan Guoguang Agrochemical

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own the majority of Sichuan Guoguang Agrochemical Co., Ltd.. This means they can collectively make decisions for the company. So they have a CN¥4.1b stake in this CN¥6.5b business. 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 28% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sichuan Guoguang Agrochemical. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Sichuan Guoguang Agrochemical better, we need to consider many other factors. Be aware that Sichuan Guoguang Agrochemical is showing 2 warning signs in our investment analysis , you should know about...

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.