Recent 8.3% pullback would hurt Meritz Financial Group Inc. (KRX:138040) insiders

Key Insights

• Insiders appear to have a vested interest in Meritz Financial Group's growth, as seen by their sizeable ownership
• Jung-Ho Cho owns 53% of the company
• Institutions own 19% of Meritz Financial Group

A look at the shareholders of Meritz Financial Group Inc. (KRX:138040) can tell us which group is most powerful. The group holding the most number of shares in the company, around 53% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 8.3% decline in share price, insiders suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Meritz Financial Group.

See our latest analysis for Meritz Financial Group

What Does The Institutional Ownership Tell Us About Meritz Financial Group?

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 Meritz Financial Group. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Meritz Financial Group's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Meritz Financial Group. Jung-Ho Cho is currently the company's largest shareholder with 53% of shares outstanding. This implies that they have majority interest control of the future of the company. With 7.4% and 3.0% of the shares outstanding respectively, National Pension Service and Norges Bank Investment Management are the second and third largest shareholders.

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 Meritz Financial Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 that insiders own more than half the Meritz Financial Group Inc. stock. This gives them a lot of power. That means insiders have a very meaningful ₩7.5t stake in this ₩14t business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public, who are usually individual investors, hold a 28% stake in Meritz Financial Group. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Meritz Financial Group better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Meritz Financial Group you should know about.

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.

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

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