The big shareholder groups in Paseco Co. Ltd (KOSDAQ:037070) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.
Paseco is not a large company by global standards. It has a market capitalization of ₩203b, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutions don't own shares in the company. Let's delve deeper into each type of owner, to discover more about Paseco.
What Does The Lack Of Institutional Ownership Tell Us About Paseco?
We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.
There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Paseco's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.
Hedge funds don't have many shares in Paseco. Jung-Han Yoo is currently the company's largest shareholder with 37% of shares outstanding. Il-Han Yoo is the second largest shareholder owning 34% of common stock, and Byung-Jin Yoo holds about 4.9% of the company stock. Note that the second and third-largest shareholders are also Chief Executive Officer and Chairman of the Board, respectively, meaning that the company's top shareholders are insiders.
To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Paseco
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.
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.
It seems that insiders own more than half the Paseco Co. Ltd stock. This gives them a lot of power. Given it has a market cap of ₩203b, that means they have ₩161b worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
General Public Ownership
With a 19% ownership, the general public have some degree of sway over Paseco. 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.
While it is well worth considering the different groups that own a company, there are other factors that are even more important.
I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
Of course this may not be the best stock to buy. So take a peek at this free 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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