Institutions along with individual investors who hold considerable shares inWPG Holdings Limited (TWSE:3702) come under pressure; lose 6.9% of holdings value

Key Insights

• The considerable ownership by individual investors in WPG Holdings indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 23 shareholders
• Institutions own 43% of WPG Holdings

If you want to know who really controls WPG Holdings Limited (TWSE:3702), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual investors with 43% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 6.9% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 43% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of WPG Holdings.

Check out our latest analysis for WPG Holdings

What Does The Institutional Ownership Tell Us About WPG Holdings?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

WPG Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 WPG Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.

WPG Holdings is not owned by hedge funds. Our data shows that Cathay Securities Investment Trust Co., LTD is the largest shareholder with 7.5% of shares outstanding. The second and third largest shareholders are Fuh Hwa Securities Investment Trust Co., Ltd. and Yuanta Securities Investment Trust Co., Ltd., with an equal amount of shares to their name at 4.8%.

A closer look at our ownership figures suggests that the top 23 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of WPG Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

We can see that insiders own shares in WPG Holdings Limited. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around NT$11b 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, who are usually individual investors, hold a 43% stake in WPG Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 4.0%, of the company's shares. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 4 warning signs for WPG Holdings (2 are significant!) that you should be aware of before investing here.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

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