LG Electronics Inc.'s (KRX:066570) top owners are retail investors with 45% stake, while 32% is held by public companies

Key Insights

• The considerable ownership by retail investors in LG Electronics indicates that they collectively have a greater say in management and business strategy
• A total of 18 investors have a majority stake in the company with 50% ownership
• Institutions own 23% of LG Electronics

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To get a sense of who is truly in control of LG Electronics Inc. (KRX:066570), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 45% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And public companies on the other hand have a 32% ownership in the company.

In the chart below, we zoom in on the different ownership groups of LG Electronics.

Check out our latest analysis for LG Electronics

What Does The Institutional Ownership Tell Us About LG Electronics?

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.

LG Electronics already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 LG Electronics, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in LG Electronics. Our data shows that LG Corp. is the largest shareholder with 32% of shares outstanding. With 6.8% and 2.7% of the shares outstanding respectively, National Pension Service and The Vanguard Group, Inc. are the second and third largest shareholders.

After doing some more digging, we found that the top 18 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of LG Electronics

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.

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.

Our information suggests that LG Electronics Inc. insiders own under 1% of the company. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own ₩1.2b worth of shares. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 45% 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.

Public Company Ownership

It appears to us that public companies own 32% of LG Electronics. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand LG Electronics better, we need to consider many other factors. For instance, we've identified 1 warning sign for LG Electronics that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.