Painful week for individual investors invested in Korea Aerospace Industries, Ltd. (KRX:047810) after 11% drop, institutions also suffered losses

Key Insights

• Significant control over Korea Aerospace Industries by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 7 shareholders own 51% of the company
• Institutional ownership in Korea Aerospace Industries is 33%

A look at the shareholders of Korea Aerospace Industries, Ltd. (KRX:047810) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual investors with 39% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of individual investors took a hit after last week’s 11% price drop, institutions with their 33% holdings also suffered.

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

See our latest analysis for Korea Aerospace Industries

What Does The Institutional Ownership Tell Us About Korea Aerospace Industries?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

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

We note that hedge funds don't have a meaningful investment in Korea Aerospace Industries. The Export-Import Bank of Korea is currently the company's largest shareholder with 26% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.2% and 8.0%, of the shares outstanding, respectively.

We did some more digging and found that 7 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 Korea Aerospace Industries

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.

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 Korea Aerospace Industries, Ltd. insiders own under 1% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own ₩262m worth of shares. 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 39% stake in the company, and hence can't easily be ignored. 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.

Private Company Ownership

It seems that Private Companies own 26%, of the Korea Aerospace Industries stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Korea Aerospace Industries better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Korea Aerospace Industries (including 2 which don't sit too well with us) .

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.