While institutions own 33% of Far Eastern New Century Corporation (TWSE:1402), individual investors are its largest shareholders with 34% ownership

Key Insights

• Significant control over Far Eastern New Century by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 8 shareholders own 50% of the company
• Institutional ownership in Far Eastern New Century is 33%

If you want to know who really controls Far Eastern New Century Corporation (TWSE:1402), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 34% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

Meanwhile, institutions make up 33% of the company’s shareholders. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.

Let's take a closer look to see what the different types of shareholders can tell us about Far Eastern New Century.

View our latest analysis for Far Eastern New Century

What Does The Institutional Ownership Tell Us About Far Eastern New Century?

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.

Far Eastern New Century already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Far Eastern New Century, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Far Eastern New Century. Our data shows that Asia Cement Corporation is the largest shareholder with 25% of shares outstanding. With 4.8% and 4.6% of the shares outstanding respectively, Asia Eastern University of Science and Technology, Endowment Arm and Cathay Securities Investment Trust Co., LTD are the second and third largest shareholders.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Far Eastern New Century

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.

We can see that insiders own shares in Far Eastern New Century Corporation. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around NT$7.5b worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

With a 34% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Far Eastern New Century. 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 3.1%, of the company's shares. 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.

Public Company Ownership

It appears to us that public companies own 26% of Far Eastern New Century. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

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. To that end, you should be aware of the 1 warning sign we've spotted with Far Eastern New Century .

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.