Capital Securities Corporation's (TWSE:6005) biggest owners are retail investors who got richer after stock soared 4.2% last week

Simply Wall St · 10/15 22:36

Key Insights

  • Significant control over Capital Securities by retail investors implies that the general public has more power to influence management and governance-related decisions
  • 43% of the business is held by the top 25 shareholders
  • Institutional ownership in Capital Securities is 16%

A look at the shareholders of Capital Securities Corporation (TWSE:6005) can tell us which group is most powerful. With 56% stake, retail investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, retail investors were the biggest beneficiaries of last week’s 4.2% gain.

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

View our latest analysis for Capital Securities

ownership-breakdown
TWSE:6005 Ownership Breakdown October 15th 2024

What Does The Institutional Ownership Tell Us About Capital Securities?

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

earnings-and-revenue-growth
TWSE:6005 Earnings and Revenue Growth October 15th 2024

Capital Securities is not owned by hedge funds. The Vanguard Group, Inc. is currently the largest shareholder, with 3.6% of shares outstanding. The second and third largest shareholders are Fuding Investment Industrial Co., Ltd. and Baozuo Investment Co., Ltd., with an equal amount of shares to their name at 3.5%.

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 it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Capital Securities

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.

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 information suggests that Capital Securities Corporation insiders own under 1% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Keep in mind that it's a big company, and the insiders own NT$35m worth of shares. The absolute value might be more important than the proportional share. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 56% of Capital Securities 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

Our data indicates that Private Companies hold 27%, of the company's shares. 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:

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 instance, we've identified 3 warning signs for Capital Securities (2 make us uncomfortable) that you should be aware of.

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.