Key Insights

• The considerable ownership by retail investors in Himax Technologies indicates that they collectively have a greater say in management and business strategy
• 48% of the business is held by the top 25 shareholders
• Insider ownership in Himax Technologies is 29%

Every investor in Himax Technologies, Inc. (NASDAQ:HIMX) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 49% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 3.6% decrease in the stock price last week, retail investors suffered the most losses, but insiders who own 29% stock also took a hit.

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

What Does The Institutional Ownership Tell Us About Himax Technologies?

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.

As you can see, institutional investors have a fair amount of stake in Himax Technologies. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Himax Technologies' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Himax Technologies. From our data, we infer that the largest shareholder is Biing-Seng Wu (who also holds the title of Top Key Executive) with 22% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. For context, the second largest shareholder holds about 6.5% of the shares outstanding, followed by an ownership of 3.8% by the third-largest shareholder.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Himax Technologies

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 insiders maintain a significant holding in Himax Technologies, Inc.. It is very interesting to see that insiders have a meaningful US$509m stake in this US$1.7b business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 49% stake in the company, and hence can't easily be ignored. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Himax Technologies better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Himax Technologies (of which 1 makes us a bit uncomfortable!) you should know about.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.