KSP Co., Ltd.'s (KOSDAQ:073010) stock price dropped 11% last week; public companies would not be happy

Key Insights

• Significant control over KSP by public companies implies that the general public has more power to influence management and governance-related decisions
• 50% of the company is held by a single shareholder (Kumkang Kind Co., Ltd.)
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls KSP Co., Ltd. (KOSDAQ:073010), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are public companies with 51% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 11% decline in share price, public companies suffered the most losses.

Let's delve deeper into each type of owner of KSP, beginning with the chart below.

See our latest analysis for KSP

What Does The Institutional Ownership Tell Us About KSP?

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.

As you can see, institutional investors have a fair amount of stake in KSP. 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. 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 KSP's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in KSP. Our data shows that Kumkang Kind Co., Ltd. is the largest shareholder with 50% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Meanwhile, the second and third largest shareholders, hold 6.7% and 4.9%, of the shares outstanding, respectively.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of KSP

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

We can report that insiders do own shares in KSP Co., Ltd.. In their own names, insiders own ₩4.3b worth of stock in the ₩154b company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 35% stake in KSP. 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 4.9%, of the KSP stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership

We can see that public companies hold 51% of the KSP 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:

It's always worth thinking about the different groups who own shares in a company. But to understand KSP better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with KSP (including 1 which makes us a bit uncomfortable) .

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.