GS Retail Co., Ltd.'s (KRX:007070) stock price dropped 3.6% last week; public companies would not be happy

Key Insights

• GS Retail's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 59% of the company is held by a single shareholder (GS Holdings Corp.)
• 15% of GS Retail is held by Institutions

Every investor in GS Retail Co., Ltd. (KRX:007070) should be aware of the most powerful shareholder groups. With 59% stake, public companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, public companies as a group endured the highest losses last week after market cap fell by ₩78b.

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

Check out our latest analysis for GS Retail

What Does The Institutional Ownership Tell Us About GS Retail?

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.

As you can see, institutional investors have a fair amount of stake in GS Retail. 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 GS Retail, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in GS Retail. Looking at our data, we can see that the largest shareholder is GS Holdings Corp. with 59% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. National Pension Service is the second largest shareholder owning 8.6% of common stock, and The Vanguard Group, Inc. holds about 1.3% of the company stock.

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 GS Retail

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.

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 data suggests that insiders own under 1% of GS Retail Co., Ltd. in their own names. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own ₩125m 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, who are usually individual investors, hold a 26% stake in GS Retail. 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 59% of GS Retail. 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 GS Retail better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for GS Retail you should know about.

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.