Retail investors who have a significant stake must be disappointed along with institutions after WPG Holdings Limited's (TWSE:3702) market cap dropped by NT$4.9b

Key Insights

• The considerable ownership by retail 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
• 43% of WPG Holdings is held by Institutions

A look at the shareholders of WPG Holdings Limited (TWSE:3702) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are retail investors with 44% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While institutions who own 43% came under pressure after market cap dropped to NT$149b last week,retail investors took the most losses.

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

View 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 can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 WPG Holdings' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in WPG Holdings. Cathay Securities Investment Trust Co., LTD is currently the company's largest shareholder with 7.9% of shares outstanding. Yuanta Securities Investment Trust Co., Ltd. is the second largest shareholder owning 4.7% of common stock, and Fuh Hwa Securities Investment Trust Co., Ltd. holds about 4.3% of the company stock.

After doing some more digging, we found that the top 23 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of WPG Holdings

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 some shares in WPG Holdings Limited. The insiders have a meaningful stake worth NT$11b. Most would see this as a real positive. Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 44% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 3.8%, of the shares on issue. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand WPG Holdings better, we need to consider many other factors. Case in point: We've spotted 5 warning signs for WPG Holdings you should be aware of, and 2 of them shouldn't be ignored.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.