Chicony Power Technology Co., Ltd.'s (TWSE:6412) last week's 7.0% decline must have disappointed public companies who have a significant stake

Key Insights

• The considerable ownership by public companies in Chicony Power Technology indicates that they collectively have a greater say in management and business strategy
• Chicony Electronics Co., Ltd. owns 52% of the company
• Insiders own 14% of Chicony Power Technology

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A look at the shareholders of Chicony Power Technology Co., Ltd. (TWSE:6412) can tell us which group is most powerful. The group holding the most number of shares in the company, around 52% to be precise, is public companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, public companies as a group endured the highest losses last week after market cap fell by NT$3.4b.

Let's take a closer look to see what the different types of shareholders can tell us about Chicony Power Technology.

View our latest analysis for Chicony Power Technology

What Does The Institutional Ownership Tell Us About Chicony 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.

As you can see, institutional investors have a fair amount of stake in Chicony Power Technology. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Chicony Power Technology's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Chicony Power Technology. Our data shows that Chicony Electronics Co., Ltd. is the largest shareholder with 52% of shares outstanding. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 1.9% by the third-largest shareholder. Additionally, the company's CEO Kuo-Hua Tseng directly holds 0.9% of the total shares outstanding.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Chicony Power Technology

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders maintain a significant holding in Chicony Power Technology Co., Ltd.. It has a market capitalization of just NT$45b, and insiders have NT$6.4b worth of shares in their own names. That's quite significant. 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, who are usually individual investors, hold a 23% stake in Chicony Power Technology. 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.

Public Company Ownership

Public companies currently own 52% of Chicony Power Technology stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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 2 warning signs for Chicony Power Technology (1 is a bit unpleasant!) 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.