Key Insights

• Guangdong Brandmax MarketingLtd's significant insider ownership suggests inherent interests in company's expansion
• The top 3 shareholders own 53% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Guangdong Brandmax Marketing Co.,Ltd. (SZSE:300805), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 67% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, insiders endured the biggest losses as the stock fell by 13%.

In the chart below, we zoom in on the different ownership groups of Guangdong Brandmax MarketingLtd.

What Does The Lack Of Institutional Ownership Tell Us About Guangdong Brandmax MarketingLtd?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Guangdong Brandmax MarketingLtd might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Hedge funds don't have many shares in Guangdong Brandmax MarketingLtd. Dingjiao Liang is currently the largest shareholder, with 32% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 13% and 7.7%, of the shares outstanding, respectively. Yong Huang, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. 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 Guangdong Brandmax MarketingLtd

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.

It seems that insiders own more than half the Guangdong Brandmax Marketing Co.,Ltd. stock. This gives them a lot of power. So they have a CN¥2.9b stake in this CN¥4.3b 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

The general public-- including retail investors -- own 31% 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Guangdong Brandmax MarketingLtd better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Guangdong Brandmax MarketingLtd (including 2 which make us uncomfortable) .

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.