Stock Analysis

Do Insiders Own Lots Of Shares In Kolon Corporation (KRX:002020)?

KOSE:A002020
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A look at the shareholders of Kolon Corporation (KRX:002020) can tell us which group is most powerful. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

Kolon is a smaller company with a market capitalization of ₩294b, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions are not really that prevalent on the share registry. We can zoom in on the different ownership groups, to learn more about Kolon.

See our latest analysis for Kolon

ownership-breakdown
KOSE:A002020 Ownership Breakdown December 5th 2020

What Does The Institutional Ownership Tell Us About Kolon?

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.

Less than 5% of Kolon is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

earnings-and-revenue-growth
KOSE:A002020 Earnings and Revenue Growth December 5th 2020

Hedge funds don't have many shares in Kolon. Looking at our data, we can see that the largest shareholder is the CEO Woong Lee with 48% of shares outstanding. With 1.3% and 1.2% of the shares outstanding respectively, The Vanguard Group, Inc. and Dimensional Fund Advisors L.P. are the second and third largest shareholders.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Kolon

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.

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 most recent data indicates that insiders own the majority of Kolon Corporation. This means they can collectively make decisions for the company. Given it has a market cap of ₩294b, that means they have ₩147b worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 47% ownership, the general public have some degree of sway over Kolon. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 1 warning sign for Kolon you should be aware of.

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. 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.
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About KOSE:A002020

Kolon

Engages in market research and management consulting, and intellectual property licensing businesses in South Korea and internationally.

Solid track record and slightly overvalued.

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