What Type Of Shareholders Make Up Cathay Real Estate Development Co.,Ltd.'s (TPE:2501) Share Registry?

Every investor in Cathay Real Estate Development Co.,Ltd. (TPE:2501) should be aware of the most powerful shareholder groups. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. We also tend to see lower insider ownership in companies that were previously publicly owned.

Cathay Real Estate DevelopmentLtd isn't enormous, but it's not particularly small either. It has a market capitalization of NT$23b, which means it would generally expect to see some institutions on the share registry. Taking a look at our data on the ownership groups (below), it seems that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholders can tell us about Cathay Real Estate DevelopmentLtd.

Check out our latest analysis for Cathay Real Estate DevelopmentLtd

What Does The Institutional Ownership Tell Us About Cathay Real Estate DevelopmentLtd?

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 Cathay Real Estate DevelopmentLtd. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Cathay Real Estate DevelopmentLtd's earnings history below. Of course, the future is what really matters.

Cathay Real Estate DevelopmentLtd is not owned by hedge funds. The company's largest shareholder is Cathay Life Insurance Employee Pension Fund Administration Committee, with ownership of 25%. Meanwhile, the second and third largest shareholders, hold 18% and 1.9%, of the shares outstanding, respectively.

We did some more digging and found that 9 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Cathay Real Estate DevelopmentLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our data suggests that insiders own under 1% of Cathay Real Estate Development Co.,Ltd. in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. It seems the board members have no more than NT$633k worth of shares in the NT$23b company. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 49% ownership, the general public have some degree of sway over Cathay Real Estate DevelopmentLtd. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 20%, of the Cathay Real Estate DevelopmentLtd 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.

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 learn about the 3 warning signs we've spotted with Cathay Real Estate DevelopmentLtd (including 2 which don't sit too well with us) .

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. 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.
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