Individual investors who hold 52% of Genius Electronic Optical Co.,Ltd. (TWSE:3406) gained 7.0%, institutions profited as well

Simply Wall St · 08/30 22:34

Key Insights

  • The considerable ownership by individual investors in Genius Electronic OpticalLtd indicates that they collectively have a greater say in management and business strategy
  • 47% of the business is held by the top 25 shareholders
  • Insiders own 14% of Genius Electronic OpticalLtd

If you want to know who really controls Genius Electronic Optical Co.,Ltd. (TWSE:3406), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 52% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While individual investors were the group that reaped the most benefits after last week’s 7.0% price gain, institutions also received a 20% cut.

In the chart below, we zoom in on the different ownership groups of Genius Electronic OpticalLtd.

Check out our latest analysis for Genius Electronic OpticalLtd

ownership-breakdown
TWSE:3406 Ownership Breakdown August 30th 2024

What Does The Institutional Ownership Tell Us About Genius Electronic OpticalLtd?

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.

Genius Electronic OpticalLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Genius Electronic OpticalLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
TWSE:3406 Earnings and Revenue Growth August 30th 2024

Hedge funds don't have many shares in Genius Electronic OpticalLtd. The company's largest shareholder is Tian Qin Chen, with ownership of 7.5%. The second and third largest shareholders are Tian Chen and Fubon Life Insurance Co., Ltd., Asset Management Arm, with an equal amount of shares to their name at 5.0%.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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 Genius Electronic OpticalLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 information suggests that insiders maintain a significant holding in Genius Electronic Optical Co.,Ltd.. It is very interesting to see that insiders have a meaningful NT$8.9b stake in this NT$64b 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, mostly comprising of individual investors, collectively holds 52% of Genius Electronic OpticalLtd shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Company Ownership

It seems that Private Companies own 15%, of the Genius Electronic OpticalLtd stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for Genius Electronic OpticalLtd (1 is a bit concerning) that 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.