Posco Future M Co., Ltd.'s (KRX:003670) last week's 4.2% decline must have disappointed public companies who have a significant stake

Key Insights

• Significant control over Posco Future M by public companies implies that the general public has more power to influence management and governance-related decisions
• 60% of the company is held by a single shareholder (POSCO Holdings Inc.)
• Institutions own 13% of Posco Future M

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A look at the shareholders of Posco Future M Co., Ltd. (KRX:003670) can tell us which group is most powerful. We can see that public companies own the lion's share in the company with 60% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As market cap fell to ₩12t last week, public companies would have faced the highest losses than any other shareholder groups of the company.

Let's take a closer look to see what the different types of shareholders can tell us about Posco Future M.

View our latest analysis for Posco Future M

What Does The Institutional Ownership Tell Us About Posco Future M?

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.

As you can see, institutional investors have a fair amount of stake in Posco Future M. 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 Posco Future M'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 Posco Future M. Our data shows that POSCO Holdings Inc. is the largest shareholder with 60% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With 5.4% and 2.8% of the shares outstanding respectively, National Pension Service and Pohang University of Science and Technology, Endowment Arm are the second and third largest shareholders.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Posco Future M

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 data suggests that insiders own under 1% of Posco Future M Co., Ltd. in their own names. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own ₩1.1b of stock. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 27% 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.

Public Company Ownership

It appears to us that public companies own 60% of Posco Future M. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Posco Future M (at least 1 which shouldn't be ignored) , and understanding them should be part of your investment process.

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.