Nongshim Co., Ltd.'s (KRX:004370) 5.1% loss last week hit both individual investors who own 34% as well as institutions

Key Insights

• Nongshim's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 51% of the business is held by the top 3 shareholders
• 31% of Nongshim is held by Institutions

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To get a sense of who is truly in control of Nongshim Co., Ltd. (KRX:004370), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are public companies with 34% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While institutions, who own 31% shares weren’t spared from last week’s ₩133b market cap drop, public companies as a group suffered the maximum losses

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

View our latest analysis for Nongshim

What Does The Institutional Ownership Tell Us About Nongshim?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Nongshim does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Nongshim, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Nongshim. Our data shows that Youlchon Chemical Co.,Ltd. is the largest shareholder with 34% of shares outstanding. For context, the second largest shareholder holds about 11% of the shares outstanding, followed by an ownership of 5.1% by the third-largest shareholder.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Nongshim

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

Our most recent data indicates that insiders own some shares in Nongshim Co., Ltd.. The insiders have a meaningful stake worth ₩197b. Most would see this as a real positive. Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 26% stake in the company, and hence can't easily be ignored. 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 34% of Nongshim. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.