retail investors who own 50% along with institutions invested in King Yuan Electronics Co., Ltd. (TWSE:2449) saw increase in their holdings value last week

Key Insights

• The considerable ownership by retail investors in King Yuan Electronics indicates that they collectively have a greater say in management and business strategy
• 45% of the business is held by the top 25 shareholders
• Institutional ownership in King Yuan Electronics is 40%

To get a sense of who is truly in control of King Yuan Electronics Co., Ltd. (TWSE:2449), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 50% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While retail investors were the group that benefitted the most from last week’s NT$8.6b market cap gain, institutions too had a 40% share in those profits.

Let's take a closer look to see what the different types of shareholders can tell us about King Yuan Electronics.

Check out our latest analysis for King Yuan Electronics

What Does The Institutional Ownership Tell Us About King Yuan Electronics?

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 King Yuan Electronics does have institutional investors; and they hold a good portion of the company's stock. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see King Yuan Electronics' historic earnings and revenue below, but keep in mind there's always more to the story.

King Yuan Electronics is not owned by hedge funds. Our data shows that Yuanta Securities Investment Trust Co., Ltd. is the largest shareholder with 5.4% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.3% and 4.1%, of the shares outstanding, respectively.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of King Yuan Electronics

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

Shareholders would probably be interested to learn that insiders own shares in King Yuan Electronics Co., Ltd.. The insiders have a meaningful stake worth NT$6.9b. Most would see this as a real positive. If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 50% stake in King Yuan Electronics, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

Our data indicates that Private Companies hold 4.3%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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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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.