Retail investors in FineMat Applied Materials Co., Ltd. (TWSE:6698) are its biggest bettors, and their bets paid off as stock gained 24% last week

Key Insights

• FineMat Applied Materials' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 12 shareholders own 41% of the company
• 17% of FineMat Applied Materials is held by insiders

A look at the shareholders of FineMat Applied Materials Co., Ltd. (TWSE:6698) can tell us which group is most powerful. The group holding the most number of shares in the company, around 59% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, retail investors were the biggest beneficiaries of last week’s 24% gain.

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

See our latest analysis for FineMat Applied Materials

What Does The Lack Of Institutional Ownership Tell Us About FineMat Applied Materials?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. Alternatively, there might be something about the company that has kept institutional investors away. FineMat Applied Materials' earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Hedge funds don't have many shares in FineMat Applied Materials. Our data shows that ELAN Microelectronics Corporation is the largest shareholder with 14% of shares outstanding. In comparison, the second and third largest shareholders hold about 10% and 7.0% of the stock. Chin-Hsiao Chao, who is the second-largest shareholder, also happens to hold the title of Top Key Executive. In addition, we found that Wei-Cheng Lih, the CEO has 1.7% of the shares allocated to their name.

A deeper look at our ownership data shows that the top 12 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of FineMat Applied Materials

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.

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.

Our most recent data indicates that insiders own a reasonable proportion of FineMat Applied Materials Co., Ltd.. Insiders own NT$563m worth of shares in the NT$3.3b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 59% stake in FineMat Applied Materials, 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 3.6%, 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.

Public Company Ownership

It appears to us that public companies own 21% of FineMat Applied Materials. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand FineMat Applied Materials better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with FineMat Applied Materials , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. So take a peek at this free 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.