Sunspring Metal Corporation (TWSE:2062) surges 11%; individual investors who own 46% shares profited along with insiders

Key Insights

• The considerable ownership by individual investors in Sunspring Metal indicates that they collectively have a greater say in management and business strategy
• 52% of the business is held by the top 5 shareholders
• Insiders own 33% of Sunspring Metal

A look at the shareholders of Sunspring Metal Corporation (TWSE:2062) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual investors with 46% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Individual investors gained the most after market cap touched NT$7.1b last week, while insiders who own 33% also benefitted.

Let's delve deeper into each type of owner of Sunspring Metal, beginning with the chart below.

See our latest analysis for Sunspring Metal

What Does The Institutional Ownership Tell Us About Sunspring Metal?

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.

Less than 5% of Sunspring Metal is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. 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.

Sunspring Metal is not owned by hedge funds. The company's CEO Qing Qi Yang is the largest shareholder with 22% of shares outstanding. For context, the second largest shareholder holds about 12% of the shares outstanding, followed by an ownership of 8.8% by the third-largest shareholder. Interestingly, the third-largest shareholder, Zheng Fa Yang is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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

Insider Ownership Of Sunspring Metal

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

It seems insiders own a significant proportion of Sunspring Metal Corporation. Insiders own NT$2.3b worth of shares in the NT$7.1b company. We 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

With a 46% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sunspring Metal. 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 18%, of the Sunspring Metal 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Sunspring Metal , and understanding them should be part of your investment process.

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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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.