S-Oil Corporation's (KRX:010950) last week's 7.0% decline must have disappointed public companies who have a significant stake

Key Insights

• The considerable ownership by public companies in S-Oil indicates that they collectively have a greater say in management and business strategy
• 62% of the company is held by a single shareholder (Saudi Arabian Oil Company)
• Institutions own 15% of S-Oil

Every investor in S-Oil Corporation (KRX:010950) should be aware of the most powerful shareholder groups. With 62% stake, public companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 7.0% decline in share price, public companies suffered the most losses.

Let's delve deeper into each type of owner of S-Oil, beginning with the chart below.

View our latest analysis for S-Oil

What Does The Institutional Ownership Tell Us About S-Oil?

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 S-Oil. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see S-Oil's historic earnings and revenue below, but keep in mind there's always more to the story.

S-Oil is not owned by hedge funds. The company's largest shareholder is Saudi Arabian Oil Company, with ownership of 62%. This implies that they have majority interest control of the future of the company. With 7.1% and 1.4% of the shares outstanding respectively, National Pension Service and The Vanguard Group, Inc. are the second and third largest shareholders.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of S-Oil

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 S-Oil Corporation insiders own under 1% of the company. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around ₩1.5b worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 23% ownership, the general public, mostly comprising of individual investors, have some degree of sway over S-Oil. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

We can see that public companies hold 62% of the S-Oil shares on issue. 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 S-Oil better, we need to consider many other factors. For example, we've discovered 4 warning signs for S-Oil (2 can't be ignored!) that you should be aware of before investing here.

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.