Retail investors who have a significant stake must be disappointed along with institutions after Samsung Heavy Industries Co., Ltd.'s (KRX:010140) market cap dropped by ₩530b

Key Insights

• The considerable ownership by retail investors in Samsung Heavy Industries indicates that they collectively have a greater say in management and business strategy
• A total of 22 investors have a majority stake in the company with 50% ownership
• Institutions own 23% of Samsung Heavy Industries

If you want to know who really controls Samsung Heavy Industries Co., Ltd. (KRX:010140), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are retail investors with 47% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions who own 23% came under pressure after market cap dropped to ₩11t last week,retail investors took the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Samsung Heavy Industries.

View our latest analysis for Samsung Heavy Industries

What Does The Institutional Ownership Tell Us About Samsung Heavy Industries?

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.

We can see that Samsung Heavy Industries does have institutional investors; and they hold a good portion of the company's stock. 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 Samsung Heavy Industries, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Samsung Heavy Industries. Looking at our data, we can see that the largest shareholder is Samsung Electronics Co., Ltd. with 16% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.4% and 6.3%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 22 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Samsung Heavy Industries

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 data suggests that insiders own under 1% of Samsung Heavy Industries 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 ₩1.3b worth of shares (at current prices). 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 47% 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

We can see that public companies hold 18% of the Samsung Heavy Industries shares on issue. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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.