Individual investors invested in First Pacific Company Limited (HKG:142) copped the brunt of last week's HK$763m market cap decline

Key Insights

• The considerable ownership by individual investors in First Pacific indicates that they collectively have a greater say in management and business strategy
• The top 3 shareholders own 52% of the company
• Insiders own 29% of First Pacific

Every investor in First Pacific Company Limited (HKG:142) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 35% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While insiders who own 29% came under pressure after market cap dropped to HK$15b last week,individual investors took the most losses.

Let's delve deeper into each type of owner of First Pacific, beginning with the chart below.

See our latest analysis for First Pacific

What Does The Institutional Ownership Tell Us About First Pacific?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that First Pacific does have institutional investors; and they hold a good portion of the company's stock. 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 First Pacific's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in First Pacific. Anthoni Salim is currently the largest shareholder, with 27% of shares outstanding. In comparison, the second and third largest shareholders hold about 19% and 7.0% of the stock. Additionally, the company's CEO Manuel Pangilinan directly holds 1.7% of the total shares outstanding.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of First Pacific

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own a reasonable proportion of First Pacific Company Limited. Insiders own HK$4.2b worth of shares in the HK$15b company. That's quite meaningful. 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

With a 35% ownership, the general public, mostly comprising of individual investors, have some degree of sway over First Pacific. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 19%, of the First Pacific stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

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. Case in point: We've spotted 2 warning signs for First Pacific you should be aware of, and 1 of them is a bit unpleasant.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com