Retail investors invested in HD Korea Shipbuilding & Offshore Engineering Co., Ltd. (KRX:009540) copped the brunt of last week's ₩311b market cap decline

Key Insights

• HD Korea Shipbuilding & Offshore Engineering's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 51% of the business is held by the top 8 shareholders
• Institutional ownership in HD Korea Shipbuilding & Offshore Engineering is 22%

To get a sense of who is truly in control of HD Korea Shipbuilding & Offshore Engineering Co., Ltd. (KRX:009540), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 43% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, retail investors endured the biggest losses as the stock fell by 3.3%.

Let's take a closer look to see what the different types of shareholders can tell us about HD Korea Shipbuilding & Offshore Engineering.

See our latest analysis for HD Korea Shipbuilding & Offshore Engineering

What Does The Institutional Ownership Tell Us About HD Korea Shipbuilding & Offshore Engineering?

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 HD Korea Shipbuilding & Offshore Engineering. 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. 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 HD Korea Shipbuilding & Offshore Engineering, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in HD Korea Shipbuilding & Offshore Engineering. The company's largest shareholder is HD Hyundai Co., Ltd., with ownership of 35%. With 6.4% and 2.2% of the shares outstanding respectively, National Pension Service and The Vanguard Group, Inc. are the second and third largest shareholders.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of HD Korea Shipbuilding & Offshore Engineering

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.

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 data suggests that insiders own under 1% of HD Korea Shipbuilding & Offshore Engineering Co., Ltd. in their own names. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around ₩1.2b worth of shares (at current prices). 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, who are usually individual investors, hold a 43% stake in HD Korea Shipbuilding & Offshore Engineering. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Public Company Ownership

Public companies currently own 35% of HD Korea Shipbuilding & Offshore Engineering stock. 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 1 warning sign with HD Korea Shipbuilding & Offshore Engineering , and understanding them should be part of your investment process.

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.