Key Insights

• Significant control over Shandong Huifa FoodstuffLtd by retail investors implies that the general public has more power to influence management and governance-related decisions
• 52% of the business is held by the top 3 shareholders
• Insider ownership in Shandong Huifa FoodstuffLtd is 23%

A look at the shareholders of Shandong Huifa Foodstuff Co.,Ltd. (SHSE:603536) can tell us which group is most powerful. We can see that retail investors own the lion's share in the company with 40% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, retail investors were the biggest beneficiaries of last week's 15% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Shandong Huifa FoodstuffLtd.

What Does The Institutional Ownership Tell Us About Shandong Huifa FoodstuffLtd?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Shandong Huifa FoodstuffLtd. 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 Shandong Huifa FoodstuffLtd's earnings history below. Of course, the future is what really matters.

Shandong Huifa FoodstuffLtd is not owned by hedge funds. Shandong Huifa Investment Co., Ltd. is currently the company's largest shareholder with 28% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 21% and 2.4%, of the shares outstanding, respectively.

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 studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 Shandong Huifa FoodstuffLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 most recent data indicates that insiders own a reasonable proportion of Shandong Huifa Foodstuff Co.,Ltd.. Insiders have a CN¥706m stake in this CN¥3.0b 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, who are usually individual investors, hold a 40% stake in Shandong Huifa FoodstuffLtd. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 31%, of the shares on issue. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Shandong Huifa FoodstuffLtd is showing 3 warning signs in our investment analysis , and 1 of those is a bit concerning...

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.