Individual investors invested in Foshan Golden Milky Way Intelligent Equipment Co., Ltd. (SZSE:300619) copped the brunt of last week's CN¥359m market cap decline

Simply Wall St · 10/18 02:02

Key Insights

Every investor in Foshan Golden Milky Way Intelligent Equipment Co., Ltd. (SZSE:300619) should be aware of the most powerful shareholder groups. With 54% stake, individual 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.

Following a 9.0% decrease in the stock price last week, individual investors suffered the most losses, but insiders who own 28% stock also took a hit.

Let's take a closer look to see what the different types of shareholders can tell us about Foshan Golden Milky Way Intelligent Equipment.

See our latest analysis for Foshan Golden Milky Way Intelligent Equipment

ownership-breakdown
SZSE:300619 Ownership Breakdown October 18th 2024

What Does The Institutional Ownership Tell Us About Foshan Golden Milky Way Intelligent Equipment?

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.

Institutions have a very small stake in Foshan Golden Milky Way Intelligent Equipment. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

earnings-and-revenue-growth
SZSE:300619 Earnings and Revenue Growth October 18th 2024

Hedge funds don't have many shares in Foshan Golden Milky Way Intelligent Equipment. The company's CEO Qifa Zhang is the largest shareholder with 21% of shares outstanding. SANRO Venture Capital is the second largest shareholder owning 9.3% of common stock, and Liang Kewei holds about 4.3% of the company stock.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Foshan Golden Milky Way Intelligent Equipment

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 most recent data indicates that insiders own a reasonable proportion of Foshan Golden Milky Way Intelligent Equipment Co., Ltd.. It has a market capitalization of just CN¥3.6b, and insiders have CN¥1.0b worth of shares in their own names. 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 54% of Foshan Golden Milky Way Intelligent Equipment. 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 Equity Ownership

With a stake of 9.3%, private equity firms could influence the Foshan Golden Milky Way Intelligent Equipment board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

Our data indicates that Private Companies hold 3.6%, of the company's shares. 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. To that end, you should learn about the 6 warning signs we've spotted with Foshan Golden Milky Way Intelligent Equipment (including 4 which make us uncomfortable) .

Of course this may not be the best stock to buy. So take a peek at this free 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.