Institutions own 26% of Hyundai Motor Company (KRX:005380) shares but individual investors control 44% of the company

Key Insights

• Hyundai Motor's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 50% of the business is held by the top 23 shareholders
• Institutional ownership in Hyundai Motor is 26%

To get a sense of who is truly in control of Hyundai Motor Company (KRX:005380), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 44% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

Institutions, on the other hand, account for 26% of the company's stockholders. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.

In the chart below, we zoom in on the different ownership groups of Hyundai Motor.

Check out our latest analysis for Hyundai Motor

What Does The Institutional Ownership Tell Us About Hyundai Motor?

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.

We can see that Hyundai Motor does have institutional investors; and they hold a good portion of the company's stock. 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 Hyundai Motor's earnings history below. Of course, the future is what really matters.

Hyundai Motor is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Hyundai Mobis Co.,Ltd with 20% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 6.6% and 5.0%, of the shares outstanding, respectively. Mong-Koo Chung, who is the third-largest shareholder, also happens to hold the title of Chairman Emeritus. Furthermore, CEO Eui-Sun Chung is the owner of 2.5% of the company's shares.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 23 shareholders, meaning that no single shareholder has a majority interest in the ownership.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Hyundai Motor

The definition of an insider can differ slightly between different countries, 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 the CEO.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own some shares in Hyundai Motor Company. Insiders own ₩3.3t 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

The general public-- including retail investors -- own 44% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

We can see that public companies hold 20% of the Hyundai Motor shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Hyundai Motor (at least 1 which shouldn't be ignored) , and understanding them should be part of your investment process.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.