Cheng Shin Rubber Ind. Co., Ltd. (TWSE:2105) most popular amongst individual investors who own 37%, insiders hold 31%

Key Insights

• The considerable ownership by individual investors in Cheng Shin Rubber Ind indicates that they collectively have a greater say in management and business strategy
• 51% of the business is held by the top 9 shareholders
• Insider ownership in Cheng Shin Rubber Ind is 31%

Every investor in Cheng Shin Rubber Ind. Co., Ltd. (TWSE:2105) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 37% ownership. 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 31% of the company's stockholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.

In the chart below, we zoom in on the different ownership groups of Cheng Shin Rubber Ind.

Check out our latest analysis for Cheng Shin Rubber Ind

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

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 Cheng Shin Rubber Ind 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Cheng Shin Rubber Ind's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Cheng Shin Rubber Ind. Ming-Han Lo is currently the largest shareholder, with 11% of shares outstanding. Jye Luo Memory Co., Ltd. is the second largest shareholder owning 10% of common stock, and Yun-Hwa Chen holds about 6.2% of the company stock. Yun-Hwa Chen, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

We did some more digging and found that 9 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

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. 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.

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 Cheng Shin Rubber Ind. Co., Ltd.. It has a market capitalization of just NT$159b, and insiders have NT$50b worth of shares in their own names. That's quite significant. 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

The general public-- including retail investors -- own 37% stake in the company, and hence can't easily be ignored. 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

Our data indicates that Private Companies hold 13%, of the company's shares. 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:

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. For example, we've discovered 1 warning sign for Cheng Shin Rubber Ind that you should be aware of before investing here.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.