Key Insights

• The considerable ownership by individual investors in Gome Telecom EquipmentLtd indicates that they collectively have a greater say in management and business strategy
• The top 6 shareholders own 43% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Gome Telecom Equipment Co.,Ltd. (SHSE:600898), then you'll have to look at the makeup of its share registry. With 57% stake, individual investors possess the maximum shares in the company. 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 23% decline in share price, individual investors suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Gome Telecom EquipmentLtd.

View our latest analysis for Gome Telecom EquipmentLtd

What Does The Lack Of Institutional Ownership Tell Us About Gome Telecom EquipmentLtd?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Gome Telecom EquipmentLtd's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Gome Telecom EquipmentLtd is not owned by hedge funds. Our data shows that Shandong Longjidao Construction Co., Ltd. is the largest shareholder with 29% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.0% and 4.2% of the stock.

Our studies suggest that the top 6 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. 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 Gome Telecom EquipmentLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

We can report that insiders do own shares in Gome Telecom Equipment Co.,Ltd.. In their own names, insiders own CN¥69m worth of stock in the CN¥1.2b company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 57% of Gome Telecom EquipmentLtd shares. 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

Our data indicates that Private Companies hold 37%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.