Recent 5.0% pullback would hurt Dongwon Industries Co., Ltd. (KRX:006040) insiders

Key Insights

• Insiders appear to have a vested interest in Dongwon Industries' growth, as seen by their sizeable ownership
• Nam-Jung Kim owns 61% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

A look at the shareholders of Dongwon Industries Co., Ltd. (KRX:006040) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 84% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 5.0% decline in share price, insiders suffered the most losses.

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

See our latest analysis for Dongwon Industries

What Does The Institutional Ownership Tell Us About Dongwon Industries?

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 Dongwon Industries does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Dongwon Industries' historic earnings and revenue below, but keep in mind there's always more to the story.

Dongwon Industries is not owned by hedge funds. Nam-Jung Kim is currently the largest shareholder, with 61% of shares outstanding. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 21% of the shares outstanding, followed by an ownership of 4.4% by the third-largest shareholder.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Dongwon Industries

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.

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 most recent data indicates that insiders own the majority of Dongwon Industries Co., Ltd.. This means they can collectively make decisions for the company. Insiders own ₩1.6t worth of shares in the ₩1.9t company. That's extraordinary! 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 11% stake in Dongwon Industries. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Dongwon Industries better, we need to consider many other factors. For example, we've discovered 3 warning signs for Dongwon Industries (1 makes us a bit uncomfortable!) 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.