SK Gas Co., Ltd.'s (KRX:018670) market cap dropped ₩117b last week; Public companies bore the brunt

Key Insights

• The considerable ownership by public companies in SK Gas indicates that they collectively have a greater say in management and business strategy
• 74% of the company is held by a single shareholder (SK Discovery Co., Ltd.)
• Institutional ownership in SK Gas is 11%

A look at the shareholders of SK Gas Co., Ltd. (KRX:018670) can tell us which group is most powerful. The group holding the most number of shares in the company, around 74% to be precise, is public companies. 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 5.2% decline in share price, public companies suffered the most losses.

In the chart below, we zoom in on the different ownership groups of SK Gas.

View our latest analysis for SK Gas

What Does The Institutional Ownership Tell Us About SK Gas?

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.

SK Gas already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 SK Gas' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in SK Gas. The company's largest shareholder is SK Discovery Co., Ltd., with ownership of 74%. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 4.1% and 2.5% of the shares outstanding respectively, National Pension Service and Norges Bank Investment Management 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 SK Gas

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that SK Gas Co., Ltd. insiders own under 1% of the company. Keep in mind that it's a big company, and the insiders own ₩2.8b worth of shares. The absolute value might be more important than the proportional share. 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 14% ownership, the general public, mostly comprising of individual investors, have some degree of sway over SK Gas. 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

It appears to us that public companies own 74% of SK Gas. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand SK Gas better, we need to consider many other factors. For instance, we've identified 3 warning signs for SK Gas (1 is potentially serious) that you should be aware of.

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.