Private companies are Ruentex Materials Co.,Ltd.'s (TWSE:8463) biggest owners and were rewarded after market cap rose by NT$608m last week

Key Insights

• The considerable ownership by private companies in Ruentex MaterialsLtd indicates that they collectively have a greater say in management and business strategy
• The top 11 shareholders own 35% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Ruentex Materials Co.,Ltd. (TWSE:8463) should be aware of the most powerful shareholder groups. With 51% stake, private companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, private companies were the biggest beneficiaries of last week’s 13% gain.

In the chart below, we zoom in on the different ownership groups of Ruentex MaterialsLtd.

See our latest analysis for Ruentex MaterialsLtd

What Does The Lack Of Institutional Ownership Tell Us About Ruentex MaterialsLtd?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. Alternatively, there might be something about the company that has kept institutional investors away. Ruentex MaterialsLtd's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Ruentex MaterialsLtd is not owned by hedge funds. Ruentex Development Co.,Ltd. is currently the company's largest shareholder with 10% of shares outstanding. For context, the second largest shareholder holds about 6.1% of the shares outstanding, followed by an ownership of 4.8% by the third-largest shareholder.

A deeper look at our ownership data shows that the top 11 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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 Ruentex MaterialsLtd

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.

Our most recent data indicates that insiders own some shares in Ruentex Materials Co.,Ltd.. It has a market capitalization of just NT$5.1b, and insiders have NT$439m worth of shares, in their own names. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 26% 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

Our data indicates that Private Companies hold 51%, 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 15% of Ruentex MaterialsLtd 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. To that end, you should learn about the 3 warning signs we've spotted with Ruentex MaterialsLtd (including 1 which is a bit unpleasant) .

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com