Retail investors among L&K Engineering Co., Ltd.'s (TWSE:6139) largest shareholders, saw gain in holdings value after stock jumped 7.3% last week

Key Insights

• Significant control over L&K Engineering by retail investors implies that the general public has more power to influence management and governance-related decisions
• A total of 17 investors have a majority stake in the company with 50% ownership
• Insiders own 10% of L&K Engineering

A look at the shareholders of L&K Engineering Co., Ltd. (TWSE:6139) can tell us which group is most powerful. We can see that retail investors own the lion's share in the company with 48% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, retail investors benefitted the most after the company's market cap rose by NT$4.0b last week.

Let's take a closer look to see what the different types of shareholders can tell us about L&K Engineering.

Check out our latest analysis for L&K Engineering

What Does The Institutional Ownership Tell Us About L&K Engineering?

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.

As you can see, institutional investors have a fair amount of stake in L&K Engineering. 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. 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 L&K Engineering's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in L&K Engineering. Shengsheng Investment Co., Ltd. is currently the company's largest shareholder with 11% of shares outstanding. With 6.1% and 4.9% of the shares outstanding respectively, Huaiyang Investment Ltd. and Xunhui Investment Industrial Co., Ltd. are the second and third largest shareholders.

A closer look at our ownership figures suggests that the top 17 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of L&K Engineering

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.

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 L&K Engineering Co., Ltd.. It has a market capitalization of just NT$58b, and insiders have NT$6.0b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public-- including retail investors -- own 48% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 24%, of the L&K Engineering stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand L&K Engineering better, we need to consider many other factors. For instance, we've identified 3 warning signs for L&K Engineering (1 is significant) that you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com