Do Directors Own Huayi Brothers Korea Co., Ltd. (KOSDAQ:204630) Shares?

If you want to know who really controls Huayi Brothers Korea Co., Ltd. (KOSDAQ:204630), then you’ll have to look at the makeup of its share registry. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. 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.

Huayi Brothers Korea is a smaller company with a market capitalization of ₩73b, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it’s seems that institutions are not on the share registry. Let’s take a closer look to see what the different types of shareholder can tell us about Huayi Brothers Korea.

See our latest analysis for Huayi Brothers Korea

KOSDAQ:A204630 Ownership Summary, January 18th 2020
KOSDAQ:A204630 Ownership Summary, January 18th 2020

What Does The Lack Of Institutional Ownership Tell Us About Huayi Brothers Korea?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it’s unusual to see larger companies without any institutional investors.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don’t attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. 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 Huayi Brothers Korea, for yourself, below.

KOSDAQ:A204630 Income Statement, January 18th 2020
KOSDAQ:A204630 Income Statement, January 18th 2020

Huayi Brothers Korea is not owned by hedge funds. Huayi Brothers Media Corporation is currently the largest shareholder, with 28% of shares outstanding. The second and third largest shareholders are Seung-Bum Ji and Seung-Hwan Ji, holding 8.9% and 8.7%, respectively.

On studying our ownership data, we found that 5 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 Huayi Brothers Korea

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board; and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board, themselves.

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.

It seems insiders own a significant proportion of Huayi Brothers Korea Co., Ltd.. Insiders own ₩13b worth of shares in the ₩73b company. 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 54% stake in A204630, 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.

Public Company Ownership

It appears to us that public companies own 28% of A204630. It’s hard to say for sure, but this suggests they have entwined business interests. This might be a strategic stake, so it’s worth watching this space for changes in ownership.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Be aware that Huayi Brothers Korea is showing 2 warning signs in our investment analysis , you should know about…

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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