Kyeryong Construction Industrial Co., Ltd.'s (KRX:013580) last week's 11% decline must have disappointed retail investors who have a significant stake

Key Insights

• Significant control over Kyeryong Construction Industrial by retail investors implies that the general public has more power to influence management and governance-related decisions
• A total of 7 investors have a majority stake in the company with 41% ownership
• 33% of Kyeryong Construction Industrial is held by insiders

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Every investor in Kyeryong Construction Industrial Co., Ltd. (KRX:013580) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 59% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While insiders who own 33% came under pressure after market cap dropped to ₩155b 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 Kyeryong Construction Industrial.

View our latest analysis for Kyeryong Construction Industrial

What Does The Institutional Ownership Tell Us About Kyeryong Construction Industrial?

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.

Kyeryong Construction Industrial already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Kyeryong Construction Industrial's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Kyeryong Construction Industrial. With a 30% stake, CEO Seung-Chan Lee is the largest shareholder. For context, the second largest shareholder holds about 5.6% of the shares outstanding, followed by an ownership of 3.8% by the third-largest shareholder. Interestingly, the third-largest shareholder, In-Koo Lee is also a Chairman Emeritus, again, indicating strong insider ownership amongst the company's top shareholders.

A deeper look at our ownership data shows that the top 7 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Kyeryong Construction Industrial

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems insiders own a significant proportion of Kyeryong Construction Industrial Co., Ltd.. Insiders own ₩52b worth of shares in the ₩155b company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 59% of Kyeryong Construction Industrial. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Kyeryong Construction Industrial has 3 warning signs (and 1 which is potentially serious) we think you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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. 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.