Public companies are Diamond Biofund Inc.'s (TWSE:6901) biggest owners and were hit after market cap dropped NT$3.5b

Key Insights

• The considerable ownership by public companies in Diamond Biofund indicates that they collectively have a greater say in management and business strategy
• The top 3 shareholders own 52% of the company
• Insider ownership in Diamond Biofund is 25%

If you want to know who really controls Diamond Biofund Inc. (TWSE:6901), then you'll have to look at the makeup of its share registry. With 39% stake, public companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 9.2% decrease in the stock price last week, public companies suffered the most losses, but insiders who own 25% stock also took a hit.

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

View our latest analysis for Diamond Biofund

What Does The Institutional Ownership Tell Us About Diamond Biofund?

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 Diamond Biofund. 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 Diamond Biofund, (below). Of course, keep in mind that there are other factors to consider, too.

Diamond Biofund is not owned by hedge funds. Our data shows that Microbio Co., Ltd. is the largest shareholder with 25% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 14% and 13%, of the shares outstanding, respectively.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.

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. 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 Diamond Biofund

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our information suggests that insiders maintain a significant holding in Diamond Biofund Inc.. Insiders own NT$8.8b worth of shares in the NT$35b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 16% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Diamond Biofund. 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 Equity Ownership

Private equity firms hold a 8.5% stake in Diamond Biofund. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

Our data indicates that Private Companies hold 5.8%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership

We can see that public companies hold 39% of the Diamond Biofund shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Diamond Biofund better, we need to consider many other factors. Be aware that Diamond Biofund is showing 3 warning signs in our investment analysis , and 2 of those are a bit unpleasant...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.

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