Pegatron Corporation's (TWSE:4938) market cap touched NT$272b last week, benefiting both retail investors who own 45% as well as institutions

Key Insights

• Pegatron's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 19 investors have a majority stake in the company with 50% ownership
• Institutional ownership in Pegatron is 27%

To get a sense of who is truly in control of Pegatron Corporation (TWSE:4938), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are retail investors with 45% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While retail investors were the group that reaped the most benefits after last week’s 9.0% price gain, institutions also received a 27% cut.

Let's delve deeper into each type of owner of Pegatron, beginning with the chart below.

See our latest analysis for Pegatron

What Does The Institutional Ownership Tell Us About Pegatron?

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.

We can see that Pegatron does have institutional investors; and they hold a good portion of the company's stock. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Pegatron, (below). Of course, keep in mind that there are other factors to consider, too.

Pegatron is not owned by hedge funds. ASUSTeK Computer Inc. is currently the company's largest shareholder with 17% of shares outstanding. With 3.8% and 3.1% of the shares outstanding respectively, Zi-Xian Tong and The Vanguard Group, Inc. are the second and third largest shareholders.

A closer look at our ownership figures suggests that the top 19 shareholders have a combined ownership of 50% implying that 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Pegatron

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Pegatron Corporation. Insiders own NT$26b worth of shares (at current prices). It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 45% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

We can see that public companies hold 17% of the Pegatron 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we've spotted with Pegatron .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.