Retail investors invested in Chenming Electronic Tech. Corp. (TWSE:3013) up 15% last week, insiders too were rewarded

Key Insights

• The considerable ownership by retail investors in Chenming Electronic Tech indicates that they collectively have a greater say in management and business strategy
• A total of 11 investors have a majority stake in the company with 40% ownership
• 21% of Chenming Electronic Tech is held by insiders

If you want to know who really controls Chenming Electronic Tech. Corp. (TWSE:3013), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 60% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While retail investors were the group that reaped the most benefits after last week’s 15% price gain, insiders also received a 21% cut.

Let's take a closer look to see what the different types of shareholders can tell us about Chenming Electronic Tech.

Check out our latest analysis for Chenming Electronic Tech

What Does The Institutional Ownership Tell Us About Chenming Electronic Tech?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Since institutions own only a small portion of Chenming Electronic Tech, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Hedge funds don't have many shares in Chenming Electronic Tech. Looking at our data, we can see that the largest shareholder is Shang Mei Precision Industrial Co., Ltd. with 18% of shares outstanding. Mu-Ho Lin is the second largest shareholder owning 16% of common stock, and Feng-Ran Lin holds about 3.2% of the company stock. Feng-Ran Lin, who is the third-largest shareholder, also happens to hold the title of Vice Chairman.

On studying our ownership data, we found that 11 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 Chenming Electronic Tech

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.

Our information suggests that insiders maintain a significant holding in Chenming Electronic Tech. Corp.. Insiders own NT$4.3b worth of shares in the NT$20b 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, mostly comprising of individual investors, collectively holds 60% of Chenming Electronic Tech 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.

Private Company Ownership

Our data indicates that Private Companies hold 18%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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. For example, we've discovered 1 warning sign for Chenming Electronic Tech that you should be aware of before investing here.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com