With 38% ownership, LG Corp. (KRX:003550) insiders have a lot at stake

Key Insights

• LG's significant insider ownership suggests inherent interests in company's expansion
• 52% of the business is held by the top 10 shareholders
• Institutions own 36% of LG

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To get a sense of who is truly in control of LG Corp. (KRX:003550), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 38% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

So, insiders of LG have a lot at stake and every decision they make on the company’s future is important to them from a financial point of view.

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

See our latest analysis for LG

What Does The Institutional Ownership Tell Us About LG?

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 LG. 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 LG, (below). Of course, keep in mind that there are other factors to consider, too.

LG is not owned by hedge funds. With a 16% stake, CEO Kwang-Mo Koo is the largest shareholder. Meanwhile, the second and third largest shareholders, hold 7.2% and 6.9%, of the shares outstanding, respectively.

We also observed that the top 10 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 LG

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

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders maintain a significant holding in LG Corp.. It has a market capitalization of just ₩12t, and insiders have ₩4.7t worth of shares in their own names. That's quite significant. 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

The general public-- including retail investors -- own 25% stake in the company, and hence can't easily be ignored. 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.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.