Allied Supreme Corp.'s (TWSE:4770) market cap dropped NT$2.0b last week; Individual investors bore the brunt

Key Insights

• The considerable ownership by individual investors in Allied Supreme indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 12 shareholders
• Insiders own 21% of Allied Supreme

To get a sense of who is truly in control of Allied Supreme Corp. (TWSE:4770), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 39% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to NT$27b last week, individual investors would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Allied Supreme.

Check out our latest analysis for Allied Supreme

What Does The Institutional Ownership Tell Us About Allied Supreme?

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

Hedge funds don't have many shares in Allied Supreme. Yongqing Investment Co., Ltd. is currently the largest shareholder, with 8.3% of shares outstanding. For context, the second largest shareholder holds about 6.5% of the shares outstanding, followed by an ownership of 5.8% by the third-largest shareholder. Sheng-Kuo Hsieh, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Furthermore, CEO Chiao-Sheng Ho is the owner of 3.5% of the company's shares.

After doing some more digging, we found that the top 12 have the combined ownership of 50% 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 Allied Supreme

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.

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 Allied Supreme Corp.. It has a market capitalization of just NT$27b, and insiders have NT$5.6b worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 39% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 30%, of the Allied Supreme stock. 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. To that end, you should be aware of the 1 warning sign we've spotted with Allied Supreme .

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.