What Kind Of Shareholders Hold The Majority In Far EasTone Telecommunications Co., Ltd.'s (TPE:4904) Shares?

A look at the shareholders of Far EasTone Telecommunications Co., Ltd. (TPE:4904) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. We also tend to see lower insider ownership in companies that were previously publicly owned.

Far EasTone Telecommunications is a pretty big company. It has a market capitalization of NT$197b. Normally institutions would own a significant portion of a company this size. In the chart below, we can see that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about Far EasTone Telecommunications.

Check out our latest analysis for Far EasTone Telecommunications

What Does The Institutional Ownership Tell Us About Far EasTone Telecommunications?

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.

As you can see, institutional investors have a fair amount of stake in Far EasTone Telecommunications. 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. 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 Far EasTone Telecommunications, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Far EasTone Telecommunications. Far Eastern New Century Corporation is currently the largest shareholder, with 38% of shares outstanding. In comparison, the second and third largest shareholders hold about 2.5% and 1.5% of the stock.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. 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 Far EasTone Telecommunications

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 information suggests that Far EasTone Telecommunications Co., Ltd. insiders own under 1% of the company. Keep in mind that it's a big company, and the insiders own NT$2.0m worth of shares. The absolute value might be more important than the proportional share. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are mostly retail investors, collectively hold 52% of Far EasTone Telecommunications shares. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Public Company Ownership

We can see that public companies hold 38% of the Far EasTone Telecommunications shares on issue. 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. For example, we've discovered 4 warning signs for Far EasTone Telecommunications (3 are significant!) that you should be aware of before investing here.

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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