Retail investors invested in Kumho Petro Chemical Co.,Ltd (KRX:011780) copped the brunt of last week's ₩176b market cap decline

Key Insights

• Significant control over Kumho Petro ChemicalLtd by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 20 shareholders own 50% of the company
• Insider ownership in Kumho Petro ChemicalLtd is 29%

A look at the shareholders of Kumho Petro Chemical Co.,Ltd (KRX:011780) can tell us which group is most powerful. The group holding the most number of shares in the company, around 46% 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).

Following a 4.5% decrease in the stock price last week, retail investors suffered the most losses, but insiders who own 29% stock also took a hit.

Let's delve deeper into each type of owner of Kumho Petro ChemicalLtd, beginning with the chart below.

View our latest analysis for Kumho Petro ChemicalLtd

What Does The Institutional Ownership Tell Us About Kumho Petro ChemicalLtd?

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.

As you can see, institutional investors have a fair amount of stake in Kumho Petro ChemicalLtd. 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 Kumho Petro ChemicalLtd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Kumho Petro ChemicalLtd. The company's largest shareholder is Chul-Wan Park, with ownership of 12%. Meanwhile, the second and third largest shareholders, hold 9.2% and 8.3%, of the shares outstanding, respectively. Jun-Kyung Park, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

After doing some more digging, we found that the top 20 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Kumho Petro ChemicalLtd

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.

Our most recent data indicates that insiders own a reasonable proportion of Kumho Petro Chemical Co.,Ltd. Insiders own ₩1.0t worth of shares in the ₩3.5t company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 46% stake in Kumho Petro ChemicalLtd. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Kumho Petro ChemicalLtd , and understanding them should be part of your investment process.

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