F&F Co., Ltd's (KRX:383220) stock price dropped 9.2% last week; public companies would not be happy

Key Insights

• The considerable ownership by public companies in F&F indicates that they collectively have a greater say in management and business strategy
• 64% of the business is held by the top 2 shareholders
• Insiders own 29% of F&F

If you want to know who really controls F&F Co., Ltd (KRX:383220), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are public companies with 34% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While insiders, who own 29% shares weren’t spared from last week’s ₩242b market cap drop, public companies as a group suffered the maximum losses

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

Check out our latest analysis for F&F

What Does The Institutional Ownership Tell Us About F&F?

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 F&F. 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 F&F's earnings history below. Of course, the future is what really matters.

F&F is not owned by hedge funds. The company's largest shareholder is F&F Holdings Co., Ltd., with ownership of 34%. With 29% and 6.7% of the shares outstanding respectively, Chang-Soo Kim and VIP Research & Management Co., Ltd. are the second and third largest shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 64% stake.

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. 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 F&F

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.

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 information suggests that insiders maintain a significant holding in F&F Co., Ltd. It has a market capitalization of just ₩2.4t, and insiders have ₩700b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 13% stake in F&F. 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 34% of F&F. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand F&F better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for F&F you should be aware of.

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.