REYON Pharmaceutical Co., Ltd.'s (KRX:102460) most bullish insider, Co-Chief Executive Officer Yong-Hwan Yoo must be pleased with the recent 19% gain

Key Insights

• Insiders appear to have a vested interest in REYON Pharmaceutical's growth, as seen by their sizeable ownership
• The top 3 shareholders own 54% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls REYON Pharmaceutical Co., Ltd. (KRX:102460), then you'll have to look at the makeup of its share registry. With 61% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders were the biggest beneficiaries of last week’s 19% gain.

In the chart below, we zoom in on the different ownership groups of REYON Pharmaceutical.

View our latest analysis for REYON Pharmaceutical

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

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 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. Alternatively, there might be something about the company that has kept institutional investors away. REYON Pharmaceutical might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Hedge funds don't have many shares in REYON Pharmaceutical. Our data suggests that Yong-Hwan Yoo, who is also the company's Co-Chief Executive Officer, holds the most number of shares at 29%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. With 17% and 7.7% of the shares outstanding respectively, Soon-Ock Jung and Jeong-Min Rue are the second and third largest shareholders. Interestingly, the second-largest shareholder, Soon-Ock Jung is also Co-Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 54% stake.

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

Insider Ownership Of REYON Pharmaceutical

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems that insiders own more than half the REYON Pharmaceutical Co., Ltd. stock. This gives them a lot of power. That means they own ₩163b worth of shares in the ₩267b company. That's quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. 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 35% stake in REYON Pharmaceutical. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand REYON Pharmaceutical better, we need to consider many other factors. For example, we've discovered 3 warning signs for REYON Pharmaceutical (1 can't be ignored!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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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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.