Paik Kwang Industrial Co., Ltd.'s (KRX:001340) 12% gain last week benefited both individual investors who own 55% as well as insiders

Key Insights

• The considerable ownership by individual investors in Paik Kwang Industrial indicates that they collectively have a greater say in management and business strategy
• 45% of the business is held by the top 13 shareholders
• Insiders own 27% of Paik Kwang Industrial

To get a sense of who is truly in control of Paik Kwang Industrial Co., Ltd. (KRX:001340), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 55% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

Individual investors gained the most after market cap touched ₩347b last week, while insiders who own 27% also benefitted.

Let's take a closer look to see what the different types of shareholders can tell us about Paik Kwang Industrial.

Check out our latest analysis for Paik Kwang Industrial

What Does The Lack Of Institutional Ownership Tell Us About Paik Kwang Industrial?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Paik Kwang Industrial, for yourself, below.

Paik Kwang Industrial is not owned by hedge funds. Sung-Hoon Kim is currently the company's largest shareholder with 26% of shares outstanding. Sangwon Commercial Company Ltd. is the second largest shareholder owning 7.2% of common stock, and Jinhan Co., Ltd. holds about 6.5% of the company stock.

Our studies suggest that the top 13 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Paik Kwang Industrial

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 information suggests that insiders maintain a significant holding in Paik Kwang Industrial Co., Ltd.. It has a market capitalization of just ₩347b, and insiders have ₩94b 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, mostly comprising of individual investors, collectively holds 55% of Paik Kwang Industrial shares. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

It seems that Private Companies own 17%, of the Paik Kwang Industrial stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Paik Kwang Industrial (at least 2 which make us uncomfortable) , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.