Could The Yung Chi Paint & Varnish Mfg.Co.,Ltd (TPE:1726) Ownership Structure Tell Us Something Useful?

Every investor in Yung Chi Paint & Varnish Mfg.Co.,Ltd (TPE:1726) should be aware of the most powerful shareholder groups. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

With a market capitalization of NT$12b, Yung Chi Paint & Varnish Mfg.Co.Ltd is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have not yet purchased much of the company. Let's take a closer look to see what the different types of shareholders can tell us about Yung Chi Paint & Varnish Mfg.Co.Ltd.

Check out our latest analysis for Yung Chi Paint & Varnish Mfg.Co.Ltd

What Does The Institutional Ownership Tell Us About Yung Chi Paint & Varnish Mfg.Co.Ltd?

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.

Since institutions own only a small portion of Yung Chi Paint & Varnish Mfg.Co.Ltd, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. So if the company itself can improve over time, we may well see more institutional buyers in the future. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

We note that hedge funds don't have a meaningful investment in Yung Chi Paint & Varnish Mfg.Co.Ltd. Yongying Investment Co., Ltd. is currently the company's largest shareholder with 23% of shares outstanding. De Xiong Zhang is the second largest shareholder owning 10% of common stock, and De Ren Zhang holds about 8.7% of the company stock.

Our research also brought to light the fact that roughly 57% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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 Yung Chi Paint & Varnish Mfg.Co.Ltd

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Yung Chi Paint & Varnish Mfg.Co.,Ltd. Insiders have a NT$5.0b stake in this NT$12b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 29% ownership, the general public have some degree of sway over Yung Chi Paint & Varnish Mfg.Co.Ltd. 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

We can see that Private Companies own 23%, of the shares on issue. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Yung Chi Paint & Varnish Mfg.Co.Ltd has 1 warning sign we think you should be aware of.

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. 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.
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