The recent 11% gain must have brightened President Ho-Jin Lee's week, Taekwang Industrial Co., Ltd.'s (KRX:003240) most bullish insider

Key Insights

• Taekwang Industrial's significant insider ownership suggests inherent interests in company's expansion
• 56% of the business is held by the top 2 shareholders
• 12% of Taekwang Industrial is held by Institutions

Our free stock report includes 1 warning sign investors should be aware of before investing in Taekwang Industrial. Read for free now.

Every investor in Taekwang Industrial Co., Ltd. (KRX:003240) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 51% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by ₩67b last week.

In the chart below, we zoom in on the different ownership groups of Taekwang Industrial.

View our latest analysis for Taekwang Industrial

What Does The Institutional Ownership Tell Us About Taekwang Industrial?

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.

We can see that Taekwang Industrial does have institutional investors; and they hold a good portion of the company's stock. 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 Taekwang Industrial's earnings history below. Of course, the future is what really matters.

Taekwang Industrial is not owned by hedge funds. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Taekwang Industrial's case, its President, Ho-Jin Lee, is the largest shareholder, holding 41% of shares outstanding. With 15% and 9.9% of the shares outstanding respectively, Tae Kwang Corporation and Won-Jun Lee are the second and third largest shareholders.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. 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 Taekwang Industrial

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.

Our most recent data indicates that insiders own the majority of Taekwang Industrial Co., Ltd.. This means they can collectively make decisions for the company. That means they own ₩352b worth of shares in the ₩694b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 16% stake in the company, and hence can't easily be ignored. 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

It seems that Private Companies own 6.6%, of the Taekwang 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.

Public Company Ownership

We can see that public companies hold 15% of the Taekwang Industrial shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Taekwang Industrial better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Taekwang Industrial .

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.