Compal Electronics, Inc. (TWSE:2324) most popular amongst individual investors who own 55% of the shares, institutions hold 38%

Key Insights

• The considerable ownership by individual investors in Compal Electronics indicates that they collectively have a greater say in management and business strategy
• 38% of the business is held by the top 25 shareholders
• Institutions own 38% of Compal Electronics

To get a sense of who is truly in control of Compal Electronics, Inc. (TWSE:2324), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 55% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And institutions on the other hand have a 38% ownership in the company. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.

In the chart below, we zoom in on the different ownership groups of Compal Electronics.

See our latest analysis for Compal Electronics

What Does The Institutional Ownership Tell Us About Compal Electronics?

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.

Compal Electronics 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 Compal Electronics' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Compal Electronics. Cathay Securities Investment Trust Co., LTD is currently the company's largest shareholder with 7.1% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 5.2% of common stock, and Yuanta Securities Investment Trust Co., Ltd. holds about 4.3% of the company stock.

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.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Compal Electronics

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.

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 see that insiders own shares in Compal Electronics, Inc.. This is a big company, so it is good to see this level of alignment. Insiders own NT$5.8b worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 55% of Compal Electronics shares. 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

We can see that public companies hold 3.5% of the Compal Electronics shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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. Be aware that Compal Electronics is showing 1 warning sign in our investment analysis , you should know about...

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.