While institutions invested in Ta Chen Stainless Pipe Co., Ltd. (TWSE:2027) benefited from last week's 4.1% gain, retail investors stood to gain the most

Key Insights

• Ta Chen Stainless Pipe's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 25 investors have a majority stake in the company with 49% ownership
• Insider ownership in Ta Chen Stainless Pipe is 11%

If you want to know who really controls Ta Chen Stainless Pipe Co., Ltd. (TWSE:2027), 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 51% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

While retail investors were the group that reaped the most benefits after last week’s 4.1% price gain, institutions also received a 14% cut.

In the chart below, we zoom in on the different ownership groups of Ta Chen Stainless Pipe.

Check out our latest analysis for Ta Chen Stainless Pipe

What Does The Institutional Ownership Tell Us About Ta Chen Stainless Pipe?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Ta Chen Stainless Pipe 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. 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 Ta Chen Stainless Pipe'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 Ta Chen Stainless Pipe. Our data shows that Brighton-Best International (Taiwan) Inc. is the largest shareholder with 14% of shares outstanding. Rung-Kun Shieh is the second largest shareholder owning 8.8% of common stock, and Yuanta Securities Investment Trust Co., Ltd. holds about 5.3% of the company stock. Rung-Kun Shieh, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Ta Chen Stainless Pipe

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.

It seems insiders own a significant proportion of Ta Chen Stainless Pipe Co., Ltd.. It has a market capitalization of just NT$76b, and insiders have NT$8.7b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 51% of Ta Chen Stainless Pipe. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Company Ownership

Our data indicates that Private Companies hold 9.7%, 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 14% of Ta Chen Stainless Pipe 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:

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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Ta Chen Stainless Pipe , and understanding them should be part of your investment process.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.