While individual investors own 24% of Taiwan High Speed Rail Corporation (TWSE:2633), state or government are its largest shareholders with 43% ownership

Key Insights

• Significant control over Taiwan High Speed Rail by state or government implies that the general public has more power to influence management and governance-related decisions
• The top 3 shareholders own 52% of the company
• 15% of Taiwan High Speed Rail is held by Institutions

A look at the shareholders of Taiwan High Speed Rail Corporation (TWSE:2633) can tell us which group is most powerful. With 43% stake, state or government possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And individual investors on the other hand have a 24% ownership in the company.

Let's take a closer look to see what the different types of shareholders can tell us about Taiwan High Speed Rail.

Check out our latest analysis for Taiwan High Speed Rail

What Does The Institutional Ownership Tell Us About Taiwan High Speed Rail?

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.

Taiwan High Speed Rail 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 Taiwan High Speed Rail's earnings history below. Of course, the future is what really matters.

Taiwan High Speed Rail is not owned by hedge funds. The company's largest shareholder is Ministry of Transportation and Communications R.O.C., with ownership of 43%. In comparison, the second and third largest shareholders hold about 4.6% and 4.3% of the stock.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Taiwan High Speed Rail

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 data suggests that insiders own under 1% of Taiwan High Speed Rail Corporation in their own names. However, it's possible that insiders might have an indirect interest through a more complex structure. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around NT$3.4m worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 24% stake in Taiwan High Speed Rail. 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 8.2%, of the shares on issue. 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.

Public Company Ownership

It appears to us that public companies own 9.4% of Taiwan High Speed Rail. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 3 warning signs for Taiwan High Speed Rail you should be aware of, and 1 of them is potentially serious.

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.