Painful week for individual investors invested in O2Micro International Limited (NASDAQ:OIIM) after 11% drop, institutions also suffered losses

By
Simply Wall St
Published
April 09, 2022
NasdaqGS:OIIM
Source: Shutterstock

If you want to know who really controls O2Micro International Limited (NASDAQ:OIIM), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual investors with 59% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions who own 34% came under pressure after market cap dropped to US$105m last week,individual investors took the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about O2Micro International.

Check out our latest analysis for O2Micro International

ownership-breakdown
NasdaqGS:OIIM Ownership Breakdown April 9th 2022

What Does The Institutional Ownership Tell Us About O2Micro International?

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.

We can see that O2Micro International does have institutional investors; and they hold a good portion of the company's stock. 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 O2Micro International, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NasdaqGS:OIIM Earnings and Revenue Growth April 9th 2022

It would appear that 6.4% of O2Micro International shares are controlled by hedge funds. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Grandeur Peak Global Advisors, LLC is currently the company's largest shareholder with 11% of shares outstanding. For context, the second largest shareholder holds about 7.6% of the shares outstanding, followed by an ownership of 6.4% by the third-largest shareholder.

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.

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 O2Micro International

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.

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.

Our data cannot confirm that board members are holding shares personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 59% stake in O2Micro International, suggesting it is a fairly popular stock. 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:

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. For example, we've discovered 2 warning signs for O2Micro International 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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