Shareholders' Holdings Are Affirmation Of The Company'S Future Development.

We believe that the logic of important shareholders' holdings of stocks lies in the fact that important shareholders have relatively high holding power to the company. The important shareholders' participation in the two tier market holdings is optimistic about the future development of the company. On the other hand, after the stock price has adjusted for a period of time near the bottom, the company's stock price is underestimated. Therefore, it is believed that the increase of important shareholders is an affirmation of the company's future development.

In order to prove this logic, we screened 1156 companies in the period from July 1, 2015 to June 30, 2016, and the total number of holdings increased by more than 1 million shares was studied. From the average return and the excess return, we can see that the stock increase can always win the market within 30 days after the announcement, and the average excess return in 4.6% days is 4.6%.

At the same time, the higher the proportion of overweight, the greater the excess earnings. Take the excess earnings within 15 days after the announcement as an example, the excess return of the stock with a ratio of more than 5% will reach 6.47%. We mainly analyze the earnings and excess earnings performance of important shareholders from the four dimensions of industry, company attributes, company size and shareholder type. Based on this, we recommend two stock selection strategies: company characteristics stock selection strategy and "bulk trading reduction + employee stock ownership" stock selection strategy.

From the perspective of the industry, there are 28 industries involving the largest shareholder in the Shen Yi class industry. Among them, the most important stockholders in the chemical industry are 109 companies, followed by 92 in the machinery and equipment industry. Banking There are at least 4 companies with significant shareholder holdings.

From the perspective of yield performance, the over profits of defense industry, electrical equipment, machinery and equipment, electronics, construction materials, nonferrous metals, medical and biological, leisure services, household appliances and other industries are better, with the defense industry's 30 day excess return reaching 23%.

From the perspective of company attributes, there are 696 private enterprises in 1156 companies, accounting for 60%, followed by local state-owned enterprises and central state-owned enterprises, 222 and 117 respectively, accounting for 19% and 10%. from Rate of return In terms of performance, the average income of non state owned enterprises is recommended by state-owned enterprises, and at the same time, considering the higher autonomy of non state enterprises, it is recommended to invest in non state-owned enterprises.

From the perspective of company size, the market value of holdings is below 10 billion yuan, accounting for 52%, and the market capitalization is less than 40 billion yuan, only 80, accounting for 7%. In the 30 days from the announcement, the company with a smaller market value outperformed the company with a larger market value, and the average return and excess return after the increase in the market value of more than 100 billion were almost negative. Therefore, we believe that we should invest in smaller companies.

from Shareholder type From the angle of view, the shareholding shareholders are mainly divided into three categories, namely, individuals, executives and companies. Among them, individual holdings generally refer to direct relatives or some retail investors of shareholders and senior executives. And the company's overweight is more complex, mainly divided into the company itself or its subsidiaries, parent company holdings, third party holdings and employee stock ownership plan.

The company's own holdings may be repurchase shares to do equity incentives, in disguised dividends, or even raise the shares to prepare for the next M & A, which are all positive. The third party's holdings will probably be reduced to third parties through bulk trading to avoid tax avoidance. Employee stock ownership plan is similar to executive shareholding, which involves the company's equity incentive policy and has a positive impact on the company's share price.

Generally speaking, almost all the stock holdings of important shareholders can get positive excess return, and the yield increases with time.