Key Insights
- The considerable ownership by private companies in SINOMACH HEAVY EQUIPMENT GROUPLTD indicates that they collectively have a greater say in management and business strategy
- 56% of the business is held by the top 2 shareholders
- Institutional ownership in SINOMACH HEAVY EQUIPMENT GROUPLTD is 27%
A look at the shareholders of SINOMACH HEAVY EQUIPMENT GROUP CO.,LTD (SHSE:601399) can tell us which group is most powerful. With 58% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
Institutions, on the other hand, account for 27% of the company's stockholders. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.
Let's delve deeper into each type of owner of SINOMACH HEAVY EQUIPMENT GROUPLTD, beginning with the chart below.
What Does The Institutional Ownership Tell Us About SINOMACH HEAVY EQUIPMENT GROUPLTD?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
As you can see, institutional investors have a fair amount of stake in SINOMACH HEAVY EQUIPMENT GROUPLTD. 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. 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 SINOMACH HEAVY EQUIPMENT GROUPLTD's earnings history below. Of course, the future is what really matters.
SINOMACH HEAVY EQUIPMENT GROUPLTD is not owned by hedge funds. China National Machinery Industry Corporation is currently the company's largest shareholder with 47% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.2% and 6.2% of the stock.
A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 56% stake.
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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of SINOMACH HEAVY EQUIPMENT GROUPLTD
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. 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 information suggests that SINOMACH HEAVY EQUIPMENT GROUP CO.,LTD insiders own under 1% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own CN¥238k worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.
General Public Ownership
The general public, who are usually individual investors, hold a 16% stake in SINOMACH HEAVY EQUIPMENT GROUPLTD. 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.
Private Company Ownership
Our data indicates that Private Companies hold 58%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand SINOMACH HEAVY EQUIPMENT GROUPLTD better, we need to consider many other factors. For instance, we've identified 1 warning sign for SINOMACH HEAVY EQUIPMENT GROUPLTD that you should be aware of.
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.
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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.