Jiangsu NanFang Precision Co.,Ltd.'s (SZSE:002553) 13% gain last week benefited both retail investors who own 50% as well as insiders

Key Insights

• The considerable ownership by retail investors in Jiangsu NanFang PrecisionLtd indicates that they collectively have a greater say in management and business strategy
• The top 12 shareholders own 50% of the company
• Insider ownership in Jiangsu NanFang PrecisionLtd is 39%

Every investor in Jiangsu NanFang Precision Co.,Ltd. (SZSE:002553) should be aware of the most powerful shareholder groups. With 50% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While retail investors were the group that reaped the most benefits after last week’s 13% price gain, insiders also received a 39% cut.

Let's take a closer look to see what the different types of shareholders can tell us about Jiangsu NanFang PrecisionLtd.

View our latest analysis for Jiangsu NanFang PrecisionLtd

What Does The Institutional Ownership Tell Us About Jiangsu NanFang PrecisionLtd?

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 Jiangsu NanFang PrecisionLtd 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. 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 Jiangsu NanFang PrecisionLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Jiangsu NanFang PrecisionLtd. Looking at our data, we can see that the largest shareholder is Jianwei Shi with 35% of shares outstanding. With 6.3% and 2.6% of the shares outstanding respectively, Shanghai Jiahong Private Fund Management Co., Ltd. and Wei Shi are the second and third largest shareholders. Wei Shi, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

After doing some more digging, we found that the top 12 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over 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. 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 Jiangsu NanFang PrecisionLtd

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders maintain a significant holding in Jiangsu NanFang Precision Co.,Ltd.. Insiders have a CN¥1.3b stake in this CN¥3.3b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 50% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Jiangsu NanFang PrecisionLtd (of which 1 doesn't sit too well with us!) 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.