Key Insights

• China MeiDong Auto Holdings' significant insider ownership suggests inherent interests in company's expansion
• The largest shareholder of the company is Fan Ye with a 52% stake
• Institutional ownership in China MeiDong Auto Holdings is 29%

A look at the shareholders of China MeiDong Auto Holdings Limited (HKG:1268) can tell us which group is most powerful. The group holding the most number of shares in the company, around 53% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 13% decline in share price, insiders suffered the most losses.

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

What Does The Institutional Ownership Tell Us About China MeiDong Auto Holdings?

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 China MeiDong Auto Holdings. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 China MeiDong Auto Holdings' earnings history below. Of course, the future is what really matters.

China MeiDong Auto Holdings is not owned by hedge funds. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In China MeiDong Auto Holdings' case, its Top Key Executive, Fan Ye, is the largest shareholder, holding 52% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.1% and 4.9%, of the shares outstanding, respectively.

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

Insider Ownership Of China MeiDong Auto Holdings

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 MeiDong Auto Holdings Limited. This means they can collectively make decisions for the company. Given it has a market cap of HK$3.9b, that means they have HK$2.1b worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 18% ownership, the general public, mostly comprising of individual investors, have some degree of sway over China MeiDong Auto Holdings. 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 MeiDong Auto Holdings better, we need to consider many other factors. Take risks for example - China MeiDong Auto Holdings has 3 warning signs we think you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.