While insiders own 24% of Tong Yang Industry Co., Ltd. (TWSE:1319), retail investors are its largest shareholders with 37% ownership

Key Insights

• Tong Yang Industry's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 11 shareholders own 50% of the company
• 24% of Tong Yang Industry is held by insiders

If you want to know who really controls Tong Yang Industry Co., Ltd. (TWSE:1319), then you'll have to look at the makeup of its share registry. With 37% stake, retail investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Individual insiders, on the other hand, account for 24% of the company's stockholders. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time.

In the chart below, we zoom in on the different ownership groups of Tong Yang Industry.

Check out our latest analysis for Tong Yang Industry

What Does The Institutional Ownership Tell Us About Tong Yang Industry?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Tong Yang Industry 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 Tong Yang Industry's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Tong Yang Industry. With a 10.0% stake, CEO Yung-Hsiang Wu is the largest shareholder. Meanwhile, the second and third largest shareholders, hold 6.7% and 6.4%, of the shares outstanding, respectively. Interestingly, the third-largest shareholder, Yeong-Maw Wu is also a Chairman of the Board, again, indicating strong insider ownership amongst the company's top shareholders.

A closer look at our ownership figures suggests that the top 11 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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 Tong Yang Industry

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.

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 Tong Yang Industry Co., Ltd.. It has a market capitalization of just NT$64b, and insiders have NT$16b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. 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 37% stake in Tong Yang Industry. 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.

Private Company Ownership

We can see that Private Companies own 14%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Tong Yang Industry better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Tong Yang Industry .

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.