Is HLB Pharmaceutical Co., Ltd's (KOSDAQ:047920) Shareholder Ownership Skewed Towards Insiders?

The big shareholder groups in HLB Pharmaceutical Co., Ltd (KOSDAQ:047920) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. 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.

HLB Pharmaceutical is a smaller company with a market capitalization of ₩226b, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions are not on the share registry. We can zoom in on the different ownership groups, to learn more about HLB Pharmaceutical.

Check out our latest analysis for HLB Pharmaceutical

What Does The Lack Of Institutional Ownership Tell Us About HLB Pharmaceutical?

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 are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. 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 HLB Pharmaceutical, for yourself, below.

HLB Pharmaceutical is not owned by hedge funds. HLB Life Science Co., Ltd. is currently the largest shareholder, with 22% of shares outstanding. Eroom Union 3 is the second largest shareholder owning 15% of common stock, and Medi Forum Co.,Ltd. holds about 6.5% of the company stock.

On studying our ownership data, we found that 10 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. 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 HLB Pharmaceutical

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 HLB Pharmaceutical Co., Ltd. It has a market capitalization of just ₩226b, and insiders have ₩15b 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 -- mostly retail investors -- own 50% of HLB Pharmaceutical. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

Our data indicates that Private Companies hold 21%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Public Company Ownership

Public companies currently own 22% of HLB Pharmaceutical stock. 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 HLB Pharmaceutical better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with HLB Pharmaceutical (including 1 which can't be ignored) .

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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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