Machvision Inc.'s (TWSE:3563) market cap surged NT$1.7b last week, retail investors who have a lot riding on the company were rewarded

Key Insights

• The considerable ownership by retail investors in Machvision indicates that they collectively have a greater say in management and business strategy
• 42% of the business is held by the top 23 shareholders
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

To get a sense of who is truly in control of Machvision Inc. (TWSE:3563), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 58% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, retail investors collectively scored the highest last week as the company hit NT$22b market cap following a 8.0% gain in the stock.

Let's delve deeper into each type of owner of Machvision, beginning with the chart below.

Check out our latest analysis for Machvision

What Does The Institutional Ownership Tell Us About Machvision?

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.

Machvision 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. 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 Machvision's historic earnings and revenue below, but keep in mind there's always more to the story.

Machvision is not owned by hedge funds. ASE Technology Holding Co., Ltd. is currently the company's largest shareholder with 23% of shares outstanding. The second and third largest shareholders are Guang-Shiah Wang and The Vanguard Group, Inc., with an equal amount of shares to their name at 2.6%. Guang-Shiah Wang, who is the second-largest shareholder, also happens to hold the title of Chief Technology Officer.

Our studies suggest that the top 23 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.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Machvision

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.

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.

We can report that insiders do own shares in Machvision Inc.. It has a market capitalization of just NT$22b, and insiders have NT$2.2b worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 58% of Machvision. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Public Company Ownership

It appears to us that public companies own 25% of Machvision. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Machvision better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Machvision (of which 2 make us uncomfortable!) you should know about.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.