While institutions invested in Gogolook Co., Ltd. (TWSE:6902) benefited from last week's 12% gain, individual investors stood to gain the most

Simply Wall St · 10/18 23:06

Key Insights

  • Significant control over Gogolook by individual investors implies that the general public has more power to influence management and governance-related decisions
  • 55% of the business is held by the top 4 shareholders
  • Insider ownership in Gogolook is 23%

To get a sense of who is truly in control of Gogolook Co., Ltd. (TWSE:6902), it is important to understand the ownership structure of the business. With 38% stake, individual investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 12% increase in the stock price last week, individual investors profited the most, but institutions who own 28% stock also stood to gain from the increase.

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

See our latest analysis for Gogolook

ownership-breakdown
TWSE:6902 Ownership Breakdown October 18th 2024

What Does The Institutional Ownership Tell Us About Gogolook?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Gogolook already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Gogolook, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
TWSE:6902 Earnings and Revenue Growth October 18th 2024

Hedge funds don't have many shares in Gogolook. The company's largest shareholder is Cathay Securities Investment Trust Co., LTD, with ownership of 28%. In comparison, the second and third largest shareholders hold about 11% and 8.6% of the stock.

On looking further, we found that 55% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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 Gogolook

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 Gogolook Co., Ltd.. It has a market capitalization of just NT$5.2b, and insiders have NT$1.2b worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 38% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Gogolook. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Public Company Ownership

It appears to us that public companies own 11% of Gogolook. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.