Samsung Electronics Co., Ltd.'s (KRX:005930) market cap dropped ₩23t last week; individual investors who hold 44% were hit as were institutions

Key Insights

• The considerable ownership by retail investors in Samsung Electronics indicates that they collectively have a greater say in management and business strategy
• A total of 25 investors have a majority stake in the company with 43% ownership
• 39% of Samsung Electronics is held by Institutions

If you want to know who really controls Samsung Electronics Co., Ltd. (KRX:005930), then you'll have to look at the makeup of its share registry. With 44% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of retail investors took a hit after last week’s 4.1% price drop, institutions with their 39% holdings also suffered.

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

Check out our latest analysis for Samsung Electronics

What Does The Institutional Ownership Tell Us About Samsung Electronics?

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 Samsung Electronics. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Samsung Electronics' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Samsung Electronics. Looking at our data, we can see that the largest shareholder is Samsung Life Insurance Co., Ltd. with 7.6% of shares outstanding. National Pension Service is the second largest shareholder owning 6.5% of common stock, and BlackRock, Inc. holds about 4.8% of the company stock.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Samsung Electronics

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.

Shareholders would probably be interested to learn that insiders own shares in Samsung Electronics Co., Ltd.. Insiders own ₩23t worth of shares (at current prices). Most would say this shows a good alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

With a 44% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Samsung Electronics. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Public Company Ownership

Public companies currently own 13% of Samsung Electronics stock. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we've identified 2 warning signs for Samsung Electronics that you should be aware of.

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.