Korea Petrochemical Ind. Co., Ltd.'s (KRX:006650) biggest owners are retail investors who got richer after stock soared 12% last week

Key Insights

• Significant control over Korea Petrochemical Ind by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 3 shareholders own 53% of the company
• Institutional ownership in Korea Petrochemical Ind is 22%

Every investor in Korea Petrochemical Ind. Co., Ltd. (KRX:006650) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 34% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, retail investors 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 Korea Petrochemical Ind.

Check out our latest analysis for Korea Petrochemical Ind

What Does The Institutional Ownership Tell Us About Korea Petrochemical Ind?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Korea Petrochemical Ind 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 Korea Petrochemical Ind's historic earnings and revenue below, but keep in mind there's always more to the story.

Korea Petrochemical Ind is not owned by hedge funds. Our data shows that KPIC Corporation Co., Ltd. is the largest shareholder with 33% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 12% and 8.6%, of the shares outstanding, respectively. Sun Kyu Lee, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Korea Petrochemical Ind

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.

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.

We can report that insiders do own shares in Korea Petrochemical Ind. Co., Ltd.. It has a market capitalization of just ₩613b, and insiders have ₩53b worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 34% stake in Korea Petrochemical Ind. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 33%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.