Lake Materials Co., Ltd.'s (KOSDAQ:281740) market cap dropped ₩143b last week; Individual investors bore the brunt

Key Insights

• Significant control over Lake Materials by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 16 shareholders own 50% of the company
• Insiders own 44% of Lake Materials

To get a sense of who is truly in control of Lake Materials Co., Ltd. (KOSDAQ:281740), it is important to understand the ownership structure of the business. We can see that individual investors own the lion's share in the company with 49% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While the holdings of individual investors took a hit after last week’s 12% price drop, insiders with their 44% also suffered.

Let's delve deeper into each type of owner of Lake Materials, beginning with the chart below.

Check out our latest analysis for Lake Materials

What Does The Institutional Ownership Tell Us About Lake Materials?

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.

As you can see, institutional investors have a fair amount of stake in Lake Materials. 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 Lake Materials' earnings history below. Of course, the future is what really matters.

Lake Materials is not owned by hedge funds. Jin-Dong Kim is currently the company's largest shareholder with 28% of shares outstanding. For context, the second largest shareholder holds about 12% of the shares outstanding, followed by an ownership of 2.0% by the third-largest shareholder.

A closer look at our ownership figures suggests that the top 16 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Lake Materials

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

It seems insiders own a significant proportion of Lake Materials Co., Ltd.. It has a market capitalization of just ₩1.1t, and insiders have ₩461b worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 49% stake in Lake Materials. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Lake Materials you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com