CJ Corporation's (KRX:001040) market cap increased by ₩258b, insiders receive a 55% cut

Key Insights

• Significant insider control over CJ implies vested interests in company growth
• Jay-Hyun Lee owns 55% of the company
• 20% of CJ is held by Institutions

To get a sense of who is truly in control of CJ Corporation (KRX:001040), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 55% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week’s 6.3% gain.

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

See our latest analysis for CJ

What Does The Institutional Ownership Tell Us About CJ?

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.

CJ 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. 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 CJ's earnings history below. Of course, the future is what really matters.

CJ is not owned by hedge funds. Jay-Hyun Lee is currently the largest shareholder, with 55% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. National Pension Service is the second largest shareholder owning 11% of common stock, and The Vanguard Group, Inc. holds about 1.4% of the company stock.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of CJ

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.

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 CJ Corporation. This gives them effective control of the company. Insiders own ₩2.2t worth of shares in the ₩4.1t company. That's extraordinary! 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, who are usually individual investors, hold a 25% stake in CJ. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand CJ better, we need to consider many other factors. For instance, we've identified 4 warning signs for CJ 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.