Formosa Prosonic Industries Berhad (KLSE:FPI) stock most popular amongst individual investors who own 42%, while public companies hold 29%
Simply Wall St
4 min read
Every investor in Formosa Prosonic Industries Berhad (KLSE:FPI) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 42% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Public companies, on the other hand, account for 29% of the company's stockholders.
In the chart below, we zoom in on the different ownership groups of Formosa Prosonic Industries Berhad.
What Does The Institutional Ownership Tell Us About Formosa Prosonic Industries Berhad?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
As you can see, institutional investors have a fair amount of stake in Formosa Prosonic Industries Berhad. 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 Formosa Prosonic Industries Berhad, (below). Of course, keep in mind that there are other factors to consider, too.
KLSE:FPI Earnings and Revenue Growth January 30th 2023
We note that hedge funds don't have a meaningful investment in Formosa Prosonic Industries Berhad. The company's largest shareholder is Wistron Corporation, with ownership of 27%. Song Hai Chang is the second largest shareholder owning 5.1% of common stock, and AHAM Asset Management Berhad holds about 3.3% of the company stock. Furthermore, CEO Chao Yuan Shih is the owner of 3.2% of the company's shares.
A closer look at our ownership figures suggests that the top 12 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of Formosa Prosonic Industries Berhad
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 Formosa Prosonic Industries Berhad. Insiders have a RM194m stake in this RM884m business. 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 42% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Formosa Prosonic Industries Berhad. 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
We can see that public companies hold 29% of the Formosa Prosonic Industries Berhad 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:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 1 warning sign for Formosa Prosonic Industries Berhad that you should be aware of before investing here.
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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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