Institutional investors may overlook Voltronic Power Technology Corp.'s (TWSE:6409) recent NT$6.6b market cap drop as long-term gains remain positive

Key Insights

• Significantly high institutional ownership implies Voltronic Power Technology's stock price is sensitive to their trading actions
• A total of 19 investors have a majority stake in the company with 51% ownership
• 15% of Voltronic Power Technology is held by insiders

To get a sense of who is truly in control of Voltronic Power Technology Corp. (TWSE:6409), it is important to understand the ownership structure of the business. We can see that institutions own the lion's share in the company with 42% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Institutional investors was the group most impacted after the company's market cap fell to NT$161b last week. Still, the 16% one-year gains may have helped mitigate their overall losses. They should, however, be mindful of further losses in the future.

Let's delve deeper into each type of owner of Voltronic Power Technology, beginning with the chart below.

See our latest analysis for Voltronic Power Technology

What Does The Institutional Ownership Tell Us About Voltronic Power Technology?

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.

Voltronic Power Technology already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Voltronic Power Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Voltronic Power Technology is not owned by hedge funds. Our data shows that Zhuo Ming Xie is the largest shareholder with 9.5% of shares outstanding. In comparison, the second and third largest shareholders hold about 4.5% and 3.6% of the stock.

A closer look at our ownership figures suggests that the top 19 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.

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

Insider Ownership Of Voltronic Power Technology

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 information suggests that insiders maintain a significant holding in Voltronic Power Technology Corp.. Insiders own NT$24b worth of shares in the NT$161b company. That's quite meaningful. 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

The general public-- including retail investors -- own 33% 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

It seems that Private Companies own 3.6%, of the Voltronic Power Technology 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.

Public Company Ownership

Public companies currently own 3.6% of Voltronic Power Technology stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 1 warning sign for Voltronic Power Technology that you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.