Merida Industry Co., Ltd.'s (TWSE:9914) largest shareholders are individual investors with 42% ownership, institutions own 28%

Key Insights

• Merida Industry's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 16 shareholders own 50% of the company
• 27% of Merida Industry is held by insiders

A look at the shareholders of Merida Industry Co., Ltd. (TWSE:9914) can tell us which group is most powerful. We can see that individual investors own the lion's share in the company with 42% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Meanwhile, institutions make up 28% of the company’s shareholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.

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

Check out our latest analysis for Merida Industry

What Does The Institutional Ownership Tell Us About Merida Industry?

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.

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

We note that hedge funds don't have a meaningful investment in Merida Industry. Song-Zhu Zeng is currently the company's largest shareholder with 16% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.0% and 5.0% of the stock.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 16 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. 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 Merida Industry

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. 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.

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 Merida Industry Co., Ltd.. It has a market capitalization of just NT$70b, and insiders have NT$19b 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, who are usually individual investors, hold a 42% stake in Merida Industry. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Merida Industry better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Merida Industry .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.