Individual investors who have a significant stake must be disappointed along with institutions after Goldsun Building Materials Co., Ltd.'s (TWSE:2504) market cap dropped by NT$2.6b

Key Insights

• Goldsun Building Materials' significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 21 shareholders own 50% of the company
• Institutional ownership in Goldsun Building Materials is 21%

If you want to know who really controls Goldsun Building Materials Co., Ltd. (TWSE:2504), then you'll have to look at the makeup of its share registry. We can see that individual investors own the lion's share in the company with 47% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 4.2% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 21% stock also took a hit.

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

View our latest analysis for Goldsun Building Materials

What Does The Institutional Ownership Tell Us About Goldsun Building Materials?

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 Goldsun Building Materials. 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. 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 Goldsun Building Materials, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Goldsun Building Materials. Shin Lan Enterprise Inc. is currently the largest shareholder, with 7.0% of shares outstanding. Taiwan Secom Co., Ltd. is the second largest shareholder owning 6.6% of common stock, and Capital Investment Trust Corporation holds about 4.9% of the company stock.

After doing some more digging, we found that the top 21 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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. 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 Goldsun Building Materials

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

We can see that insiders own shares in Goldsun Building Materials Co., Ltd.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around NT$3.6b worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 47% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Goldsun Building Materials. 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 20%, of the shares on issue. 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

Public companies currently own 6.6% of Goldsun Building Materials stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Goldsun Building Materials better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Goldsun Building Materials (of which 1 is concerning!) you should know about.

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.