Key Insights

• The considerable ownership by retail investors in Sichuan Etrol Technologies indicates that they collectively have a greater say in management and business strategy
• A total of 21 investors have a majority stake in the company with 44% ownership
• 20% of Sichuan Etrol Technologies is held by Institutions

Every investor in Sichuan Etrol Technologies Co., Ltd. (SZSE:300370) should be aware of the most powerful shareholder groups. With 56% stake, retail investors 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.

While institutions, who own 20% shares weren't spared from last week's CN¥485m market cap drop, retail investors as a group suffered the maximum losses

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

What Does The Institutional Ownership Tell Us About Sichuan Etrol Technologies?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Sichuan Etrol Technologies does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Sichuan Etrol Technologies' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Sichuan Etrol Technologies. Yibin Xuzhou District Chuangyi Industrial Investment Co., Ltd. is currently the company's largest shareholder with 15% of shares outstanding. Shenzhen High-Tech Investment Group Co., Ltd., Asset Management Arm is the second largest shareholder owning 14% of common stock, and Ling Yu holds about 6.6% of the company stock.

Our studies suggest that the top 21 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. 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 Sichuan Etrol Technologies

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

Shareholders would probably be interested to learn that insiders own shares in Sichuan Etrol Technologies Co., Ltd.. It has a market capitalization of just CN¥4.9b, and insiders have CN¥398m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 56% of Sichuan Etrol Technologies shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Company Ownership

It seems that Private Companies own 15%, of the Sichuan Etrol Technologies stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private 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. Case in point: We've spotted 2 warning signs for Sichuan Etrol Technologies you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.