Evergreen Steel Corp.'s (TWSE:2211) 6.1% gain last week benefited both public companies who own 28% as well as insiders

Key Insights

• The considerable ownership by public companies in Evergreen Steel indicates that they collectively have a greater say in management and business strategy
• 56% of the business is held by the top 6 shareholders
• 24% of Evergreen Steel is held by insiders

If you want to know who really controls Evergreen Steel Corp. (TWSE:2211), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are public companies with 28% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While public companies were the group that reaped the most benefits after last week’s 6.1% price gain, insiders also received a 24% cut.

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

Check out our latest analysis for Evergreen Steel

What Does The Institutional Ownership Tell Us About Evergreen Steel?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Evergreen Steel does have institutional investors; and they hold a good portion of the company's stock. 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 Evergreen Steel, (below). Of course, keep in mind that there are other factors to consider, too.

Evergreen Steel is not owned by hedge funds. Our data shows that Evergreen Marine Corporation (Taiwan) Ltd. is the largest shareholder with 19% of shares outstanding. Kuo-Hua Chang is the second largest shareholder owning 11% of common stock, and Capital Investment Trust Corporation holds about 7.1% of the company stock.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 Evergreen Steel

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.

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.

It seems insiders own a significant proportion of Evergreen Steel Corp.. Insiders own NT$10b worth of shares in the NT$44b 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

The general public, who are usually individual investors, hold a 10% stake in Evergreen Steel. 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

It seems that Private Companies own 19%, of the Evergreen Steel stock. 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 28% of the Evergreen Steel shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Evergreen Steel better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Evergreen Steel (including 1 which is a bit unpleasant) .

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.