Following recent decline, SL Corporation's (KRX:005850) top shareholder Co-Chief Executive Officer Sung-Yeob Lee sees holdings value drop by 4.6%

Key Insights

• SL's significant insider ownership suggests inherent interests in company's expansion
• A total of 3 investors have a majority stake in the company with 59% ownership
• Institutional ownership in SL is 19%

A look at the shareholders of SL Corporation (KRX:005850) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 60% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 4.6% decline in share price, insiders suffered the most losses.

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

View our latest analysis for SL

What Does The Institutional Ownership Tell Us About SL?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

SL already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 SL, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in SL. Our data suggests that Sung-Yeob Lee, who is also the company's Co-Chief Executive Officer, holds the most number of shares at 34%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. With 15% and 10% of the shares outstanding respectively, Choong Gon Lee and Seung-Hoon Lee are the second and third largest shareholders. Note that two of the top three shareholders are also Co-Chief Executive Officer and Member of the Board of Directors, respectively, once again pointing to significant ownership by company insiders.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 59% stake.

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

Insider Ownership Of SL

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 own more than half of SL Corporation. This gives them effective control of the company. That means insiders have a very meaningful ₩876b stake in this ₩1.5t business. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 14% stake in the company, and hence can't easily be ignored. 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.

Private Company Ownership

It seems that Private Companies own 7.1%, of the SL stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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 instance, we've identified 1 warning sign for SL that you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.