Retail investors invested in Formosa Prosonic Industries Berhad (KLSE:FPI) copped the brunt of last week's RM72m market cap decline

Key Insights

• The considerable ownership by retail investors in Formosa Prosonic Industries Berhad indicates that they collectively have a greater say in management and business strategy
• 51% of the business is held by the top 12 shareholders
• Insider ownership in Formosa Prosonic Industries Berhad is 21%

Every investor in Formosa Prosonic Industries Berhad (KLSE:FPI) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 41% to be precise, is retail investors. 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 10% decline in share price, retail investors suffered the most losses.

Let's delve deeper into each type of owner of Formosa Prosonic Industries Berhad, beginning with the chart below.

View 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.

Formosa Prosonic Industries Berhad already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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.

Hedge funds don't have many shares in Formosa Prosonic Industries Berhad. The company's largest shareholder is Wistron Corporation, with ownership of 27%. For context, the second largest shareholder holds about 5.1% of the shares outstanding, followed by an ownership of 3.2% by the third-largest shareholder. Chao Yuan Shih, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

After doing some more digging, we found that the top 12 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Formosa Prosonic Industries Berhad

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

It seems insiders own a significant proportion of Formosa Prosonic Industries Berhad. Insiders have a RM124m stake in this RM596m business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 41% stake in Formosa Prosonic Industries Berhad. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Public Company Ownership

Public companies currently own 29% of Formosa Prosonic Industries Berhad stock. 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 Formosa Prosonic Industries Berhad better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Formosa Prosonic Industries Berhad .

Of course this may not be the best stock to buy. So take a peek at this free 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.