Wisdom Marine Lines Co., Limited (Cayman)'s (TWSE:2637) stock price dropped 8.1% last week; individual investors would not be happy

Key Insights

• The considerable ownership by individual investors in Wisdom Marine Lines Limited (Cayman) indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 5 shareholders
• 28% of Wisdom Marine Lines Limited (Cayman) is held by insiders

Every investor in Wisdom Marine Lines Co., Limited (Cayman) (TWSE:2637) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 34% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While insiders, who own 28% shares weren’t spared from last week’s NT$4.6b market cap drop, individual investors as a group suffered the maximum losses

In the chart below, we zoom in on the different ownership groups of Wisdom Marine Lines Limited (Cayman).

Check out our latest analysis for Wisdom Marine Lines Limited (Cayman)

What Does The Institutional Ownership Tell Us About Wisdom Marine Lines Limited (Cayman)?

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.

Wisdom Marine Lines Limited (Cayman) already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Wisdom Marine Lines Limited (Cayman), (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Wisdom Marine Lines Limited (Cayman). Looking at our data, we can see that the largest shareholder is the CEO Chun-Sheng Lan with 28% of shares outstanding. Pescadores Merchandise Co., Ltd is the second largest shareholder owning 7.0% of common stock, and Unicorn Maritime Agency Co, Ltd holds about 5.5% of the company stock.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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

Insider Ownership Of Wisdom Marine Lines Limited (Cayman)

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 a reasonable proportion of Wisdom Marine Lines Co., Limited (Cayman). It is very interesting to see that insiders have a meaningful NT$15b stake in this NT$53b business. 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 34% 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.

Private Company Ownership

Our data indicates that Private Companies hold 26%, of the company's shares. 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.

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 learn about the 3 warning signs we've spotted with Wisdom Marine Lines Limited (Cayman) (including 1 which 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com