Seoul Auction Co. Ltd. (KOSDAQ:063170) surges 15%; retail investors who own 57% shares profited along with insiders

Key Insights

• The considerable ownership by retail investors in Seoul Auction indicates that they collectively have a greater say in management and business strategy
• 43% of the business is held by the top 15 shareholders
• Insiders own 29% of Seoul Auction

Every investor in Seoul Auction Co. Ltd. (KOSDAQ:063170) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 57% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While retail investors were the group that reaped the most benefits after last week’s 15% price gain, insiders also received a 29% cut.

In the chart below, we zoom in on the different ownership groups of Seoul Auction.

See our latest analysis for Seoul Auction

What Does The Institutional Ownership Tell Us About Seoul Auction?

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 Seoul Auction. 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. 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 Seoul Auction, (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 Seoul Auction. Our data suggests that Ho-Jae Lee, who is also the company's Co-Chief Executive Officer, holds the most number of shares at 26%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. Meanwhile, the second and third largest shareholders, hold 5.6% and 4.2%, of the shares outstanding, respectively.

A deeper look at our ownership data shows that the top 15 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Seoul Auction

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

It seems insiders own a significant proportion of Seoul Auction Co. Ltd.. Insiders own ₩42b worth of shares in the ₩146b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 57% of Seoul Auction. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Seoul Auction better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Seoul Auction (including 1 which shouldn't be ignored) .

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com