Guangdong Lingxiao Pump Industry Co.,Ltd.'s (SZSE:002884) CEO Hai Bo Wang is the most upbeat insider, and their holdings increased by 11% last week

Key Insights

• Insiders appear to have a vested interest in Guangdong Lingxiao Pump IndustryLtd's growth, as seen by their sizeable ownership
• A total of 3 investors have a majority stake in the company with 53% ownership
• Institutions own 19% of Guangdong Lingxiao Pump IndustryLtd

A look at the shareholders of Guangdong Lingxiao Pump Industry Co.,Ltd. (SZSE:002884) can tell us which group is most powerful. With 51% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week’s 11% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Guangdong Lingxiao Pump IndustryLtd.

See our latest analysis for Guangdong Lingxiao Pump IndustryLtd

What Does The Institutional Ownership Tell Us About Guangdong Lingxiao Pump IndustryLtd?

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.

We can see that Guangdong Lingxiao Pump IndustryLtd does have institutional investors; and they hold a good portion of the company's stock. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Guangdong Lingxiao Pump IndustryLtd, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Guangdong Lingxiao Pump IndustryLtd. With a 30% stake, CEO Hai Bo Wang is the largest shareholder. In comparison, the second and third largest shareholders hold about 17% and 6.8% of the stock.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Guangdong Lingxiao Pump IndustryLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 Guangdong Lingxiao Pump Industry Co.,Ltd.. This gives them effective control of the company. So they have a CN¥3.2b stake in this CN¥6.3b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 30% stake in Guangdong Lingxiao Pump IndustryLtd. 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 instance, we've identified 1 warning sign for Guangdong Lingxiao Pump IndustryLtd that you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.