While institutions own 24% of SinoPac Financial Holdings Company Limited (TWSE:2890), individual investors are its largest shareholders with 59% ownership

Simply Wall St · 10/18 22:10

Key Insights

  • The considerable ownership by individual investors in SinoPac Financial Holdings indicates that they collectively have a greater say in management and business strategy
  • The top 25 shareholders own 39% of the company
  • Institutions own 24% of SinoPac Financial Holdings

A look at the shareholders of SinoPac Financial Holdings Company Limited (TWSE:2890) can tell us which group is most powerful. With 59% stake, individual investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Institutions, on the other hand, account for 24% of the company's stockholders. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time.

In the chart below, we zoom in on the different ownership groups of SinoPac Financial Holdings.

View our latest analysis for SinoPac Financial Holdings

ownership-breakdown
TWSE:2890 Ownership Breakdown October 18th 2024

What Does The Institutional Ownership Tell Us About SinoPac Financial Holdings?

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 SinoPac Financial Holdings. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at SinoPac Financial Holdings' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
TWSE:2890 Earnings and Revenue Growth October 18th 2024

We note that hedge funds don't have a meaningful investment in SinoPac Financial Holdings. YFY Inc. is currently the largest shareholder, with 7.4% of shares outstanding. Yuanta Securities Investment Trust Co., Ltd. is the second largest shareholder owning 3.8% of common stock, and BlackRock, Inc. holds about 3.6% of the company stock.

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 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. 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 SinoPac Financial Holdings

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.

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 information suggests that SinoPac Financial Holdings Company Limited insiders own under 1% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own NT$187m worth of shares. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 59% of SinoPac Financial Holdings 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

It seems that Private Companies own 4.2%, of the SinoPac Financial Holdings stock. 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.

Public Company Ownership

We can see that public companies hold 10% of the SinoPac Financial Holdings shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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 SinoPac Financial Holdings you should be aware of, and 1 of them makes us a bit uncomfortable.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.