Individual investors who hold 52% of Universal Microelectronics Co., Ltd. (TWSE:2413) gained 12%, insiders profited as well

Key Insights

• Significant control over Universal Microelectronics by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 14 investors have a majority stake in the company with 48% ownership
• Insider ownership in Universal Microelectronics is 37%

A look at the shareholders of Universal Microelectronics Co., Ltd. (TWSE:2413) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual investors with 52% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While individual investors were the group that reaped the most benefits after last week’s 12% price gain, insiders also received a 37% cut.

In the chart below, we zoom in on the different ownership groups of Universal Microelectronics.

View our latest analysis for Universal Microelectronics

What Does The Lack Of Institutional Ownership Tell Us About Universal Microelectronics?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

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. Universal Microelectronics might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Universal Microelectronics is not owned by hedge funds. The company's CEO Zhengming Ou is the largest shareholder with 31% of shares outstanding. In comparison, the second and third largest shareholders hold about 10% and 1.5% of the stock. Interestingly, the third-largest shareholder, Guangchun Xu is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

A deeper look at our ownership data shows that the top 14 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. 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 Universal Microelectronics

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.

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.

Our most recent data indicates that insiders own a reasonable proportion of Universal Microelectronics Co., Ltd.. Insiders own NT$1.2b worth of shares in the NT$3.4b company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 52% stake in Universal Microelectronics, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

We can see that Private Companies own 11%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Universal Microelectronics better, we need to consider many other factors. Be aware that Universal Microelectronics is showing 2 warning signs in our investment analysis , you should know about...

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.