Key Insights

• Significant insider control over China Nature Energy Technology Holdings implies vested interests in company growth
• Liquan Cheng owns 75% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in China Nature Energy Technology Holdings Limited (HKG:1597) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 75% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit HK$1.5b market cap following a 56% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about China Nature Energy Technology Holdings.

View our latest analysis for China Nature Energy Technology Holdings

What Does The Lack Of Institutional Ownership Tell Us About China Nature Energy Technology Holdings?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of China Nature Energy Technology Holdings, for yourself, below.

Hedge funds don't have many shares in China Nature Energy Technology Holdings. Our data suggests that Liquan Cheng, who is also the company's Top Key Executive, holds the most number of shares at 75%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company.

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 China Nature Energy Technology Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own the majority of China Nature Energy Technology Holdings Limited. This means they can collectively make decisions for the company. So they have a HK$1.1b stake in this HK$1.5b business. 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

The general public-- including retail investors -- own 25% stake in the company, and hence can't easily be ignored. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand China Nature Energy Technology Holdings better, we need to consider many other factors. Take risks for example - China Nature Energy Technology Holdings has 3 warning signs (and 1 which can't be ignored) we think you should know about.

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.