Hyundai Engineering & Construction Co.,Ltd.'s (KRX:000720) market cap surged ₩866b last week, retail investors who have a lot riding on the company were rewarded

Key Insights

• The considerable ownership by retail investors in Hyundai Engineering & ConstructionLtd indicates that they collectively have a greater say in management and business strategy
• The top 8 shareholders own 51% of the company
• Institutional ownership in Hyundai Engineering & ConstructionLtd is 19%

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To get a sense of who is truly in control of Hyundai Engineering & Construction Co.,Ltd. (KRX:000720), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 46% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, retail investors benefitted the most after the company's market cap rose by ₩866b last week.

In the chart below, we zoom in on the different ownership groups of Hyundai Engineering & ConstructionLtd.

View our latest analysis for Hyundai Engineering & ConstructionLtd

What Does The Institutional Ownership Tell Us About Hyundai Engineering & ConstructionLtd?

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.

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

Hedge funds don't have many shares in Hyundai Engineering & ConstructionLtd. Hyundai Motor Company is currently the company's largest shareholder with 21% of shares outstanding. For context, the second largest shareholder holds about 10.0% of the shares outstanding, followed by an ownership of 8.6% by the third-largest shareholder.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 Hyundai Engineering & ConstructionLtd

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

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.

Our information suggests that Hyundai Engineering & Construction Co.,Ltd. insiders own under 1% of the company. Keep in mind that it's a big company, and the insiders own ₩1.2b worth of shares. The absolute value might be more important than the proportional share. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 46% 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.

Public Company Ownership

We can see that public companies hold 35% of the Hyundai Engineering & ConstructionLtd 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. Case in point: We've spotted 1 warning sign for Hyundai Engineering & ConstructionLtd you should be aware of.

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.