ShunSin Technology Holdings Limited's (TWSE:6451) stock price dropped 6.6% last week; public companies would not be happy

Key Insights

• Significant control over ShunSin Technology Holdings by public companies implies that the general public has more power to influence management and governance-related decisions
• The largest shareholder of the company is Hon Hai Precision Industry Co., Ltd. with a 60% stake
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in ShunSin Technology Holdings Limited (TWSE:6451) should be aware of the most powerful shareholder groups. We can see that public companies own the lion's share in the company with 60% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, public companies as a group endured the highest losses last week after market cap fell by NT$1.7b.

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

Check out our latest analysis for ShunSin Technology Holdings

What Does The Institutional Ownership Tell Us About ShunSin Technology Holdings?

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.

We can see that ShunSin Technology Holdings does have institutional investors; and they hold a good portion of the company's stock. 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 ShunSin Technology Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.

ShunSin Technology Holdings is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Hon Hai Precision Industry Co., Ltd. with 60% of shares outstanding. This implies that they have majority interest control of the future of the company. In comparison, the second and third largest shareholders hold about 3.5% and 1.8% of the stock. Furthermore, CEO Wen Yi Hsu is the owner of 0.7% of the company's shares.

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. 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 ShunSin Technology Holdings

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that ShunSin Technology Holdings Limited insiders own under 1% of the company. It has a market capitalization of just NT$24b, and the board has only NT$170m worth of shares in their own names. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 30% stake in ShunSin Technology Holdings. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Public Company Ownership

Public companies currently own 60% of ShunSin Technology Holdings stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - ShunSin Technology Holdings has 3 warning signs (and 2 which make us uncomfortable) we think you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.