Key Insights

• Given the large stake in the stock by institutions, Xinyi Solar Holdings' stock price might be vulnerable to their trading decisions
• 51% of the business is held by the top 7 shareholders
• Recent purchases by insiders

Every investor in Xinyi Solar Holdings Limited (HKG:968) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 27% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And institutional investors saw their holdings value drop by 4.6% last week. The recent loss, which adds to a one-year loss of 48% for stockholders, may not sit well with this group of investors. Also referred to as "smart money", institutions have a lot of sway over how a stock's price moves. As a result, if the downtrend continues, institutions may face pressures to sell Xinyi Solar Holdings, which might have negative implications on individual investors.

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

Check out our latest analysis for Xinyi Solar Holdings

What Does The Institutional Ownership Tell Us About Xinyi Solar Holdings?

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.

As you can see, institutional investors have a fair amount of stake in Xinyi Solar Holdings. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Xinyi Solar Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Xinyi Solar Holdings. Xinyi Glass Holdings Limited is currently the company's largest shareholder with 23% of shares outstanding. In comparison, the second and third largest shareholders hold about 13% and 3.7% of the stock. Furthermore, CEO Yau Ching Lee is the owner of 3.6% of the company's shares.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Xinyi Solar Holdings

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.

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 information suggests that insiders maintain a significant holding in Xinyi Solar Holdings Limited. It has a market capitalization of just HK$37b, and insiders have HK$9.7b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 24% stake in Xinyi Solar 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.

Public Company Ownership

We can see that public companies hold 23% of the Xinyi Solar Holdings shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Xinyi Solar Holdings better, we need to consider many other factors. For instance, we've identified 2 warning signs for Xinyi Solar Holdings that you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.