What Kind Of Shareholders Hold The Majority In Novatek Microelectronics Corp.'s (TPE:3034) Shares?

A look at the shareholders of Novatek Microelectronics Corp. (TPE:3034) can tell us which group is most powerful. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. We also tend to see lower insider ownership in companies that were previously publicly owned.

Novatek Microelectronics has a market capitalization of NT$185b, so it's too big to fly under the radar. We'd expect to see both institutions and retail investors owning a portion of the company. In the chart below, we can see 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 Novatek Microelectronics.

See our latest analysis for Novatek Microelectronics

What Does The Institutional Ownership Tell Us About Novatek Microelectronics?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Novatek Microelectronics already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Novatek Microelectronics' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Novatek Microelectronics. The company's largest shareholder is The Vanguard Group, Inc., with ownership of 3.3%. With 3.2% and 3.1% of the shares outstanding respectively, Schroder Investment Management (Hong Kong) Limited and BlackRock, Inc. are the second and third largest shareholders.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Novatek Microelectronics

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

Shareholders would probably be interested to learn that insiders own shares in Novatek Microelectronics Corp.. The insiders have a meaningful stake worth NT$8.1b. Most would see this as a real positive. Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, with a 49% stake in the company, will not 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Novatek Microelectronics better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Novatek Microelectronics you should be aware of, and 1 of them is potentially serious.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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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