Korea Petrochemical Ind. Co., Ltd.'s (KRX:006650) last week's 9.7% decline must have disappointed individual investors who have a significant stake

Key Insights

• Significant control over Korea Petrochemical Ind by individual investors implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 3 shareholders
• Institutions own 19% of Korea Petrochemical Ind

If you want to know who really controls Korea Petrochemical Ind. Co., Ltd. (KRX:006650), then you'll have to look at the makeup of its share registry. We can see that individual investors own the lion's share in the company with 37% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to ₩645b last week, individual investors would have faced the highest losses than any other shareholder groups of the company.

Let's take a closer look to see what the different types of shareholders can tell us about Korea Petrochemical Ind.

Check out our latest analysis for Korea Petrochemical Ind

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

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

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. 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 Korea Petrochemical Ind's earnings history below. Of course, the future is what really matters.

Korea Petrochemical Ind is not owned by hedge funds. KPIC Corporation Co., Ltd. is currently the company's largest shareholder with 33% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 9.8% 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.

After doing some more digging, we found that the top 3 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. 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

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 see that insiders own shares in Korea Petrochemical Ind. Co., Ltd.. As individuals, the insiders collectively own ₩56b worth of the ₩645b company. 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 37% 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. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

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

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.

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