Himax Technologies, Inc.'s (NASDAQ:HIMX) market cap dropped US$82m last week; Retail investors bore the brunt

Key Insights

• The considerable ownership by retail investors in Himax Technologies indicates that they collectively have a greater say in management and business strategy
• 46% of the business is held by the top 25 shareholders
• Insiders own 29% of Himax Technologies

To get a sense of who is truly in control of Himax Technologies, Inc. (NASDAQ:HIMX), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 51% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While insiders who own 29% came under pressure after market cap dropped to US$905m last week,retail investors took the most losses.

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

View our latest analysis for Himax Technologies

What Does The Institutional Ownership Tell Us About Himax Technologies?

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.

As you can see, institutional investors have a fair amount of stake in Himax Technologies. 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. 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 Himax Technologies' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Himax Technologies. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Himax Technologies' case, its Top Key Executive, Biing-Seng Wu, is the largest shareholder, holding 22% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.5% and 3.5% of the stock.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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 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 Himax Technologies

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems insiders own a significant proportion of Himax Technologies, Inc.. Insiders own US$263m worth of shares in the US$905m company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 51% of Himax Technologies shares. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Himax Technologies has 1 warning sign we think you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.