While institutions invested in Wistron NeWeb Corporation (TWSE:6285) benefited from last week's 4.9% gain, retail investors stood to gain the most

Key Insights

• Significant control over Wistron NeWeb by retail investors implies that the general public has more power to influence management and governance-related decisions
• 47% of the business is held by the top 25 shareholders
• Institutional ownership in Wistron NeWeb is 20%

A look at the shareholders of Wistron NeWeb Corporation (TWSE:6285) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are retail investors with 53% 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 4.9% price gain, institutions also received a 20% cut.

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

Check out our latest analysis for Wistron NeWeb

What Does The Institutional Ownership Tell Us About Wistron NeWeb?

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 Wistron NeWeb does have institutional investors; and they hold a good portion of the company's stock. 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 Wistron NeWeb's historic earnings and revenue below, but keep in mind there's always more to the story.

Wistron NeWeb is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Wistron Corporation with 20% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.1% and 4.5% of the stock. In addition, we found that Jeffrey Gau, the CEO has 0.7% of the shares allocated to their name.

On studying our ownership data, we found that 25 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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Wistron NeWeb

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 Wistron NeWeb Corporation. 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$2.3b worth of shares (at current prices). 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, mostly comprising of individual investors, collectively holds 53% of Wistron NeWeb 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.

Public Company Ownership

Public companies currently own 20% of Wistron NeWeb stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Wistron NeWeb is showing 1 warning sign in our investment analysis , you should know about...

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.