Retail investors who are among the largest shareholders of L&K Engineering Co., Ltd. (TWSE:6139) saw the value of their investments rise after the shares rose 7.3% last week

Key insights

• The significant control over L&K Engineering by private investors means that the general public has greater power to influence management and governance decisions.
• In total, 17 investors have a majority stake in the company with 50% ownership
• Insiders own 10% of L&K Engineering

A look at the shareholders of L&K Engineering Co., Ltd. (TWSE:6139) can tell us which group is the most powerful. We can see that retail investors own the lion’s share of the company with 48% ownership. In other words, the group has the most upside potential (or downside risk).

It is clear that retail investors benefited the most from the company’s NT$4.0 billion increase in market capitalization last week.

Let’s take a closer look at what the different types of shareholders can tell us about L&K Engineering.

View our latest analysis for L&K Engineering

What does institutional ownership tell us about L&K Engineering?

Institutional investors often compare their own returns to the returns of a widely used index. They therefore usually consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a significant stake in L&K Engineering. This means that the analysts working for those institutions have looked at the stock and like it. But like everyone else, they could be wrong. When multiple institutions own a stock, there is always a risk that they are in a ‘crowded trade’. When such a trade fails, multiple parties can compete to sell shares quickly. This risk is greater in a company without a history of growth. You can see the historic earnings and revenue of L&K Engineering below, but keep in mind that there is always more to it than meets the eye.

Hedge funds do not hold many shares in L&K Engineering. Shengsheng Investment Co., Ltd. is currently the largest shareholder of the company with 11% of the outstanding shares. With 6.1% and 4.9% of the outstanding shares, Huaiyang Investment Ltd. and Xunhui Investment Industrial Co., Ltd. are the second and third largest shareholders, respectively.

If we look at our ownership figures, it turns out that the 17 largest shareholders have a combined ownership of 50%. This means that no single shareholder has a majority interest.

While it is useful to study institutional ownership data for a company, it is also useful to study analyst sentiment to know which way the wind is blowing. We are not picking up any analyst coverage of the stock at the moment, so it is unlikely that the company is widely held.

Insider owned by L&K Engineering

The definition of an insider can vary slightly from country to country, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or CEO.

Insider ownership is positive when it indicates that leadership thinks 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 have a significant stake in L&K Engineering Co., Ltd.. It has a market cap of just NT$58 billion, and insiders hold NT$6.0 billion worth of shares in their own names. That’s quite significant. Most would be happy to see the board of directors investing alongside them. You can check this free chart of recent insider trades.

General public property

The general public, including retail investors, own 48% of the company’s shares and therefore cannot simply be ignored. While this group may not necessarily call the shots, it can certainly have a real influence on the way the company is run.

Owned by a private company

It seems that Private Companies own 24% of L&K Engineering shares. It is difficult to draw conclusions from this fact alone, so it is worth looking at who owns these private companies. Sometimes insiders or other related parties have a stake in shares in a publicly traded company through a separate private company.

Next steps:

It’s always worth thinking about the different groups that own shares in a company. But to understand L&K Engineering better, we need to consider many other factors. For example, we have identified 3 warning signs for L&K Engineering (1 is significant) what you should be aware of.

If you prefer to look at another company, one with potentially better financial results, don’t miss this one. free list of interesting companies, supported by solid financial data.

NB: The figures in this article have been calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month in which the financial statement is dated. This may not correspond to the figures in the full annual report.

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This article from Simply Wall St is general in nature. We comment solely on historical data and analyst forecasts, using an objective methodology. Our articles are not intended as financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your objectives or financial situation. We aim to provide you with a long-term analysis driven by fundamental data. Please 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 the shares mentioned.

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