While institutions own 26% of Weichai Power Co., Ltd. (HKG:2338), individual investors are its largest shareholders with 54% ownership
Key Insights
- The considerable ownership by individual investors in Weichai Power indicates that they collectively have a greater say in management and business strategy
- 41% of the business is held by the top 25 shareholders
- Institutions own 26% of Weichai Power
A look at the shareholders of Weichai Power Co., Ltd. (HKG:2338) can tell us which group is most powerful. The group holding the most number of shares in the company, around 54% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).
Institutions, on the other hand, account for 26% of the company's stockholders. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time.
Let's delve deeper into each type of owner of Weichai Power, beginning with the chart below.
Check out our latest analysis for Weichai Power
What Does The Institutional Ownership Tell Us About Weichai Power?
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.
We can see that Weichai Power 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. 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 Weichai Power's earnings history below. Of course, the future is what really matters.
Weichai Power is not owned by hedge funds. Our data shows that Shandong Heavy Industry Group Co., Ltd. is the largest shareholder with 17% of shares outstanding. For context, the second largest shareholder holds about 3.5% of the shares outstanding, followed by an ownership of 1.9% by the third-largest shareholder.
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 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Weichai Power
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 some shares in Weichai Power Co., Ltd.. The insiders have a meaningful stake worth HK$3.0b. we sometimes take an interest in whether they have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a substantial 54% stake in Weichai Power, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.
Private Company Ownership
We can see that Private Companies own 19%, of the shares on issue. 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:
It's always worth thinking about the different groups who own shares in a company. But to understand Weichai Power better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Weichai Power .
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.
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.