Retail investors in Taiwan Secom Co., Ltd. (TWSE:9917) are its biggest bettors, and their bets paid off as stock gained 4.6% last week

Key Insights

• Significant control over Taiwan Secom by retail investors implies that the general public has more power to influence management and governance-related decisions
• A total of 8 investors have a majority stake in the company with 51% ownership
• 20% of Taiwan Secom is held by Institutions

If you want to know who really controls Taiwan Secom Co., Ltd. (TWSE:9917), 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 33% to be precise, is retail investors. 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$2.7b last week.

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

See our latest analysis for Taiwan Secom

What Does The Institutional Ownership Tell Us About Taiwan Secom?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Taiwan Secom. 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 Taiwan Secom'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 Taiwan Secom. The company's largest shareholder is SECOM CO., LTD., with ownership of 29%. With 4.9% and 4.1% of the shares outstanding respectively, Chengxin Investment Co., Ltd. and Chunghwa Post Co., Ltd. are the second and third largest shareholders. Additionally, the company's CEO Jian-Han Lin directly holds 0.8% of the total shares outstanding.

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.

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. 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 Taiwan Secom

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own some shares in Taiwan Secom Co., Ltd.. The insiders have a meaningful stake worth NT$1.6b. Most would see this as a real positive. 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

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 15%, of the Taiwan Secom 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

It appears to us that public companies own 30% of Taiwan Secom. 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. Be aware that Taiwan Secom is showing 1 warning sign in our investment analysis , you should know about...

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.