Painful week for public companies invested in Hyosung Heavy Industries Corporation (KRX:298040) after 7.8% drop, institutions also suffered losses

Key Insights

• Hyosung Heavy Industries' significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 3 shareholders own 60% of the company
• Insider ownership in Hyosung Heavy Industries is 16%

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To get a sense of who is truly in control of Hyosung Heavy Industries Corporation (KRX:298040), it is important to understand the ownership structure of the business. With 33% stake, public companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 7.8% decrease in the stock price last week, public companies suffered the most losses, but institutions who own 27% stock also took a hit.

Let's delve deeper into each type of owner of Hyosung Heavy Industries, beginning with the chart below.

See our latest analysis for Hyosung Heavy Industries

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

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 Hyosung Heavy Industries. 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 Hyosung Heavy 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 Hyosung Heavy Industries. Our data shows that Hyosung Corporation is the largest shareholder with 33% of shares outstanding. With 15% and 12% of the shares outstanding respectively, Hyun-Joon Cho and National Pension Service are the second and third largest shareholders.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 60% stake.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Hyosung Heavy Industries

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.

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 most recent data indicates that insiders own a reasonable proportion of Hyosung Heavy Industries Corporation. It is very interesting to see that insiders have a meaningful ₩645b stake in this ₩3.9t business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public-- including retail investors -- own 24% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Public Company Ownership

Public companies currently own 33% of Hyosung Heavy Industries stock. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we've spotted with Hyosung Heavy Industries .

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.