Institutions profited after Lotte Chilsung Beverage Co., Ltd.'s (KRX:005300) market cap rose ₩115b last week but public companies profited the most

Key Insights

• Lotte Chilsung Beverage's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 2 shareholders own 51% of the company
• 30% of Lotte Chilsung Beverage is held by Institutions

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To get a sense of who is truly in control of Lotte Chilsung Beverage Co., Ltd. (KRX:005300), 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 43% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 9.4% increase in the stock price last week, public companies profited the most, but institutions who own 30% stock also stood to gain from the increase.

Let's take a closer look to see what the different types of shareholders can tell us about Lotte Chilsung Beverage.

View our latest analysis for Lotte Chilsung Beverage

What Does The Institutional Ownership Tell Us About Lotte Chilsung Beverage?

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 Lotte Chilsung Beverage. 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. 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 Lotte Chilsung Beverage's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Lotte Chilsung Beverage. Our data shows that LOTTE Corporation is the largest shareholder with 43% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.1% and 7.4% of the stock.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 51% stake.

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 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 Lotte Chilsung Beverage

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.

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.

We can report that insiders do own shares in Lotte Chilsung Beverage Co., Ltd.. It has a market capitalization of just ₩1.3t, and insiders have ₩90b worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 11% stake in Lotte Chilsung Beverage. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

Our data indicates that Private Companies hold 8.8%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership

Public companies currently own 43% of Lotte Chilsung Beverage stock. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Be aware that Lotte Chilsung Beverage is showing 3 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.