How Much Of Formosa Prosonic Industries Berhad (KLSE:FPI) Do Insiders Own?

A look at the shareholders of Formosa Prosonic Industries Berhad (KLSE:FPI) can tell us which group is most powerful. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

Formosa Prosonic Industries Berhad is a smaller company with a market capitalization of RM816m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about Formosa Prosonic Industries Berhad.

Check out our latest analysis for Formosa Prosonic Industries Berhad

What Does The Institutional Ownership Tell Us About Formosa Prosonic Industries Berhad?

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 Formosa Prosonic Industries Berhad does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Formosa Prosonic Industries Berhad's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Formosa Prosonic Industries Berhad. Our data shows that Wistron Corporation is the largest shareholder with 28% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 5.3% and 4.6%, of the shares outstanding, respectively. In addition, we found that Chao Yuan Shih, the CEO has 3.2% of the shares allocated to their name.

We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Formosa Prosonic Industries Berhad

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.

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 a reasonable proportion of Formosa Prosonic Industries Berhad. It has a market capitalization of just RM816m, and insiders have RM173m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 36% ownership, the general public have some degree of sway over Formosa Prosonic Industries Berhad. 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

Public companies currently own 30% of Formosa Prosonic Industries Berhad stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Formosa Prosonic Industries Berhad better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Formosa Prosonic Industries Berhad you should know about.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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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