What Kind Of Investors Own Most Of Formosa Chemicals & Fibre Corporation (TPE:1326)?

The big shareholder groups in Formosa Chemicals & Fibre Corporation (TPE:1326) have power over the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that used to be publicly owned tend to have lower insider ownership.

Formosa Chemicals & Fibre has a market capitalization of NT$487b, so it's too big to fly under the radar. We'd expect to see both institutions and retail investors owning a portion of the company. In the chart below, we can see that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholders can tell us about Formosa Chemicals & Fibre.

Check out our latest analysis for Formosa Chemicals & Fibre

What Does The Institutional Ownership Tell Us About Formosa Chemicals & Fibre?

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.

Formosa Chemicals & Fibre already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Formosa Chemicals & Fibre's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Formosa Chemicals & Fibre. Chang Gung Medical Foundation is currently the largest shareholder, with 19% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.4% and 3.8% of the stock.

After doing some more digging, we found that the top 15 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Formosa Chemicals & Fibre

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. 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.

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.

I can report that insiders do own shares in Formosa Chemicals & Fibre Corporation. Insiders own NT$22b worth of shares (at current prices). I sometimes take an interest in whether they have been buying or selling.

General Public Ownership

With a 46% ownership, the general public have some degree of sway over Formosa Chemicals & Fibre. 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.

Private Company Ownership

Our data indicates that Private Companies hold 33%, of the company's shares. 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

Public companies currently own 6.6% of Formosa Chemicals & Fibre stock. 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 Formosa Chemicals & Fibre better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Formosa Chemicals & Fibre .

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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