Cheng Shin Rubber Ind. Co., Ltd. (TWSE:2105) insiders have significant skin in the game with 42% ownership

Key Insights

• Insiders appear to have a vested interest in Cheng Shin Rubber Ind's growth, as seen by their sizeable ownership
• A total of 6 investors have a majority stake in the company with 54% ownership
• Institutions own 20% of Cheng Shin Rubber Ind

A look at the shareholders of Cheng Shin Rubber Ind. Co., Ltd. (TWSE:2105) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 42% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.

Let's delve deeper into each type of owner of Cheng Shin Rubber Ind, beginning with the chart below.

See our latest analysis for Cheng Shin Rubber Ind

What Does The Institutional Ownership Tell Us About Cheng Shin Rubber Ind?

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.

Cheng Shin Rubber Ind 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Cheng Shin Rubber Ind, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Cheng Shin Rubber Ind. Tsai-Jen Luo is currently the company's largest shareholder with 17% of shares outstanding. With 11% and 10% of the shares outstanding respectively, Ming-Han Lo and Jye Luo Memory Co., Ltd. are the second and third largest shareholders.

We also observed that the top 6 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.

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 Cheng Shin Rubber Ind

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own a reasonable proportion of Cheng Shin Rubber Ind. Co., Ltd.. It is very interesting to see that insiders have a meaningful NT$68b stake in this NT$160b business. 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

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Cheng Shin Rubber Ind. 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.

Private Company Ownership

It seems that Private Companies own 13%, of the Cheng Shin Rubber Ind stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we've spotted with Cheng Shin Rubber Ind .

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.