What Kind Of Shareholders Hold The Majority In China Wire & Cable Co., Ltd.'s (TPE:1603) Shares?

A look at the shareholders of China Wire & Cable Co., Ltd. (TPE:1603) can tell us which group is most powerful. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

China Wire & Cable is a smaller company with a market capitalization of NT$4.3b, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions don't own many shares in the company. Let's take a closer look to see what the different types of shareholders can tell us about China Wire & Cable.

Check out our latest analysis for China Wire & Cable

What Does The Institutional Ownership Tell Us About China Wire & Cable?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Institutions have a very small stake in China Wire & Cable. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

China Wire & Cable is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is He Yuan Chen with 17% of shares outstanding. In comparison, the second and third largest shareholders hold about 14% and 11% of the stock. Jin-Cuan Chen, who is the second-largest shareholder, also happens to hold the title of Chairman of Management Board.

Our research also brought to light the fact that roughly 53% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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

Insider Ownership Of China Wire & Cable

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.

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.

It seems insiders own a significant proportion of China Wire & Cable Co., Ltd.. Insiders have a NT$2.0b stake in this NT$4.3b business. I 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 holds a 19% stake in China Wire & Cable. 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 32%, of the China Wire & Cable stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

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. Take risks for example - China Wire & Cable has 2 warning signs (and 1 which is significant) we think you should know about.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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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