Could The Shinpoong Paper Mfg. Co., Ltd (KRX:002870) Ownership Structure Tell Us Something Useful?

A look at the shareholders of Shinpoong Paper Mfg. Co., Ltd (KRX:002870) can tell us which group is most powerful. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

Shinpoong Paper Mfg is not a large company by global standards. It has a market capitalization of ₩115b, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutions don't own shares in the company. Let's delve deeper into each type of owner, to discover more about Shinpoong Paper Mfg.

See our latest analysis for Shinpoong Paper Mfg

What Does The Lack Of Institutional Ownership Tell Us About Shinpoong Paper Mfg?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

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. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. 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 Shinpoong Paper Mfg, for yourself, below.

Shinpoong Paper Mfg is not owned by hedge funds. Our data shows that Hak-Hun Chung is the largest shareholder with 39% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 5.2% and 0.04%, of the shares outstanding, respectively.

Our studies suggest that the top 4 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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Shinpoong Paper Mfg

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.

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.

Our most recent data indicates that insiders own a reasonable proportion of Shinpoong Paper Mfg. Co., Ltd. It has a market capitalization of just ₩115b, and insiders have ₩45b 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 retail investors, hold a substantial 56% stake in Shinpoong Paper Mfg, suggesting it is a fairly popular stock. This size of ownership gives retail investors collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

We can see that Private Companies own 5.2%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Shinpoong Paper Mfg better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Shinpoong Paper Mfg (of which 1 makes us a bit uncomfortable!) you should know about.

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. 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.
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