Sanyang Motor Co., Ltd.'s (TWSE:2206) last week's 5.7% decline must have disappointed retail investors who have a significant stake

Simply Wall St · 10/14 22:37

Key Insights

  • The considerable ownership by retail investors in Sanyang Motor indicates that they collectively have a greater say in management and business strategy
  • The top 25 shareholders own 48% of the company
  • Insiders own 21% of Sanyang Motor

If you want to know who really controls Sanyang Motor Co., Ltd. (TWSE:2206), then you'll have to look at the makeup of its share registry. We can see that retail investors own the lion's share in the company with 52% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While insiders who own 21% came under pressure after market cap dropped to NT$55b last week,retail investors took the most losses.

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

View our latest analysis for Sanyang Motor

ownership-breakdown
TWSE:2206 Ownership Breakdown October 14th 2024

What Does The Institutional Ownership Tell Us About Sanyang Motor?

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

earnings-and-revenue-growth
TWSE:2206 Earnings and Revenue Growth October 14th 2024

Sanyang Motor is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Dayang Investment Co., Ltd. with 6.9% of shares outstanding. Li Zhu Wu is the second largest shareholder owning 6.4% of common stock, and Jin Wan Tsai holds about 6.0% of the company stock. Additionally, the company's CEO Ching-Yuan Wu directly holds 2.6% of the total shares outstanding.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Sanyang Motor

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

It seems insiders own a significant proportion of Sanyang Motor Co., Ltd.. It has a market capitalization of just NT$55b, and insiders have NT$12b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 52% of Sanyang Motor 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.

Private Company Ownership

Our data indicates that Private Companies hold 14%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Sanyang Motor better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Sanyang Motor , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.