Publicly listed Nuvoton Technology Corporation (TWSE:4919) was one of the biggest bettors, and that bet paid off, with shares up 3.5% last week.

Key Insights

• The public company’s significant control over Nuvoton Technology means that the general public has more power to influence management and governance decisions.
• 51% of the company's shares are held by a single shareholder, Winbond Electronics Corporation.
• 15% of Nuvoton Technology is owned by institutional investors.

Investors in Nuvoton Technology Corporation (TWSE:4919) should be aware of the most powerful shareholder groups. The group with the largest shareholding in the company (about 51% to be exact) is the public company. In other words, the group that will gain (or lose) the most from investing in the company.

As a result, the company's shares rose 3.5 percent, giving it a market capitalization of NT$55 billion, making it the highest-scoring listed company of all last week.

The chart below zooms in on the different ownership groups at Nuvoton Technology.

View our latest analysis for Nuvoton Technology

What does institutional ownership tell us about Nuvoton Technology?

Institutions typically compare their own performance against a benchmark when reporting to their own investors, so when a stock is included in a major index, they often increase their interest in that stock. You can expect most companies to have some institutional investors on the register, especially if they are growing.

We can see that Nuvoton Technology has institutional investors, who hold a significant percentage of the company's shares. This may indicate that the company has a certain degree of credibility in the investment community. However, it's best to be careful about relying on the approval of institutional investors; they get it wrong sometimes, too. When multiple institutions own shares, there's always a risk that they may get caught in a 'crowded trade'. If such a trade goes wrong, multiple parties may compete to sell shares fast. This risk is higher in companies without a history of growth. You can see Nuvoton Technology's historic earnings and revenue below, but remember there's always more to the story.

We note that hedge funds don't have much investment in Nuvoton Technology. Our data shows that Winbond Electronics Corporation is the largest shareholder with 51% of shares outstanding. This means it has a majority stake in the company's future. In comparison, the second and third largest shareholders hold about 4.3% and 2.0% of the stock.

Researching institutional ownership is a good way to gauge and sift through a stock's expected performance. The same can be achieved by studying analyst sentiment. There will be some analyst coverage of the stock, but it may become more well-known over time.

Insider Ownership of Nuvoton Technology

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. While a company's management runs the business, the CEO is accountable to the board, even if he or she is a board member.

While most view insider ownership as a positive because it can indicate the board is well aligned with other shareholders, in some cases it can lead to too much power being concentrated in one group.

Our most recent data indicates that insiders own less than 1% of Nuvoton Technology Corporation shares. However, they may have an indirect interest through corporate structures that we're not aware of. Since it's a fairly large company, it's possible that directors could own a significant stake in the company, but not much of a proportionate interest. In this case, the directors own NT$66m worth of shares (at current prices). It's good to see that directors own shares, but it might be worth checking if insiders have been buying shares.

General public property

With an ownership of 33%, the general public, mostly retail investors, have some degree of influence over Nuvoton Technology, and while this size of ownership may not be enough to tilt policy decisions in their favour, they can still collectively influence company policies.

Public Company Ownership

Publicly listed companies currently own 51% of Nuvoton Technology's shares. While it's impossible to say for sure, this suggests intertwined business interests between the companies. This could be a strategic stake, so it's worth keeping an eye on this area for any changes in ownership.

Next steps:

It's very interesting to look at who owns a company, but to get real insight you need to take other information into account, like risk. Every company has risks. 3 warning signs for Nuvoton Technology (One of which is a concern!) Things you should know.

If you're like me, you might want to think about whether the company is likely to grow or shrink, and luckily you can check this free report showing analyst forecasts for the company in the future.

Note: The figures in this article are calculated using data from the last 12 months, which refers to the 12-month period ending on the last day of the month in which the financial statements are dated, which may not match the figures in the annual report.

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This article by Simply Wall St is general in nature. We use only unbiased methodologies to provide commentary based on historical data and analyst forecasts, and our articles are not intended as financial advice. It is not a recommendation to buy or sell stocks, and does not take into account your objectives, or your financial situation. We seek to provide long-term focused analysis driven by fundamental data. Note that our analysis may not take into account the latest price sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.