WinWay Technology Co., Ltd.’s (TWSE:6515) market cap touched NT$27b last week, benefiting both retail investors who own 43% as well as institutions

Key Insights

• The considerable ownership by retail investors in WinWay Technology indicates that they collectively have a greater say in management and business strategy
• A total of 13 investors have a majority stake in the company with 51% ownership
• 23% of WinWay Technology is held by insiders

To get a sense of who is truly in control of WinWay Technology Co., Ltd. (TWSE:6515), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 43% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

While retail investors were the group that reaped the most benefits after last week’s 7.2% price gain, institutions also received a 25% cut.

In the chart below, we zoom in on the different ownership groups of WinWay Technology.

See our latest analysis for WinWay Technology

What Does The Institutional Ownership Tell Us About WinWay Technology?

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 WinWay Technology. 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 WinWay Technology, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don’t have a meaningful investment in WinWay Technology. The company’s CEO Mark Wang is the largest shareholder with 14% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.8% and 4.1% of the stock. Interestingly, the third-largest shareholder, JQ Lee is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company’s top shareholders.

A closer look at our ownership figures suggests that the top 13 shareholders have a combined ownership of 51% implying that 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 WinWay Technology

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our most recent data indicates that insiders own a reasonable proportion of WinWay Technology Co., Ltd.. Insiders have a NT$6.2b stake in this NT$27b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public– including retail investors — own 43% stake in the company, and hence can’t easily be ignored. 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 9.4%, of the shares on issue. It’s hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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 2 warning signs for WinWay Technology you should be aware of, and 1 of them shouldn’t be ignored.

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.