What Kind Of Shareholders Hold The Majority In LegoChem Biosciences, Inc.'s (KOSDAQ:141080) Shares?

A look at the shareholders of LegoChem Biosciences, Inc. (KOSDAQ:141080) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

LegoChem Biosciences isn't enormous, but it's not particularly small either. It has a market capitalization of ₩1.5t, which means it would generally expect to see some institutions on the share registry. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about LegoChem Biosciences.

See our latest analysis for LegoChem Biosciences

What Does The Institutional Ownership Tell Us About LegoChem Biosciences?

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.

We can see that LegoChem Biosciences does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see LegoChem Biosciences' historic earnings and revenue below, but keep in mind there's always more to the story.

LegoChem Biosciences is not owned by hedge funds. The company's CEO Yong-Zu Kim is the largest shareholder with 11% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.7% and 6.6% of the stock.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of LegoChem Biosciences

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

Our most recent data indicates that insiders own a reasonable proportion of LegoChem Biosciences, Inc.. It has a market capitalization of just ₩1.5t, and insiders have ₩339b worth of shares in their own names. That's quite significant. 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 -- mostly retail investors -- own 58% of LegoChem Biosciences. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand LegoChem Biosciences better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for LegoChem Biosciences you should know about.

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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