Kolon Life Science Inc.'s (KOSDAQ:102940) market cap surged ₩22b last week, individual investors who have a lot riding on the company were rewarded

Key Insights

• Kolon Life Science's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 13 shareholders own 44% of the company
• Insiders own 18% of Kolon Life Science

A look at the shareholders of Kolon Life Science Inc. (KOSDAQ:102940) can tell us which group is most powerful. We can see that individual investors own the lion's share in the company with 56% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, individual investors benefitted the most after the company's market cap rose by ₩22b last week.

Let's take a closer look to see what the different types of shareholders can tell us about Kolon Life Science.

View our latest analysis for Kolon Life Science

What Does The Lack Of Institutional Ownership Tell Us About Kolon Life Science?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at 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 Kolon Life Science, for yourself, below.

We note that hedge funds don't have a meaningful investment in Kolon Life Science. Kolon Corporation is currently the company's largest shareholder with 26% of shares outstanding. In comparison, the second and third largest shareholders hold about 18% and 0.2% of the stock.

A deeper look at our ownership data shows that the top 13 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Kolon Life Science

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders maintain a significant holding in Kolon Life Science Inc.. Insiders own ₩44b worth of shares in the ₩246b 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 comprising of individual investors, collectively holds 56% of Kolon Life Science shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Public Company Ownership

It appears to us that public companies own 26% of Kolon Life Science. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Kolon Life Science better, we need to consider many other factors. For example, we've discovered 2 warning signs for Kolon Life Science (1 is significant!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.