Key Insights

• iSoftStone Information Technology (Group)'s significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 52% of the business is held by the top 7 shareholders
• Insider ownership in iSoftStone Information Technology (Group) is 24%

Every investor in iSoftStone Information Technology (Group) Co., Ltd. (SZSE:301236) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion's share in the company with 33% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 17% increase in the stock price last week, retail investors profited the most, but insiders who own 24% stock also stood to gain from the increase.

Let's take a closer look to see what the different types of shareholders can tell us about iSoftStone Information Technology (Group).

What Does The Institutional Ownership Tell Us About iSoftStone Information Technology (Group)?

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.

iSoftStone Information Technology (Group) already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 iSoftStone Information Technology (Group)'s earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in iSoftStone Information Technology (Group). Looking at our data, we can see that the largest shareholder is the CEO Tianwen W. Liu with 24% of shares outstanding. For context, the second largest shareholder holds about 9.7% of the shares outstanding, followed by an ownership of 4.9% by the third-largest shareholder.

We also observed that the top 7 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of iSoftStone Information Technology (Group)

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.

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.

It seems insiders own a significant proportion of iSoftStone Information Technology (Group) Co., Ltd.. Insiders own CN¥9.2b worth of shares in the CN¥39b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over iSoftStone Information Technology (Group). 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 Equity Ownership

Private equity firms hold a 9.7% stake in iSoftStone Information Technology (Group). This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

We can see that Private Companies own 12%, 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. Case in point: We've spotted 2 warning signs for iSoftStone Information Technology (Group) you should be aware of, and 1 of them is potentially serious.

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.