Retail investors among Chong Kun Dang Pharmaceutical Corp.'s (KRX:185750) largest stockholders and were hit after last week's 7.9% price drop

Key Insights

• The considerable ownership by retail investors in Chong Kun Dang Pharmaceutical indicates that they collectively have a greater say in management and business strategy
• The top 4 shareholders own 54% of the company
• 14% of Chong Kun Dang Pharmaceutical is held by insiders

A look at the shareholders of Chong Kun Dang Pharmaceutical Corp. (KRX:185750) can tell us which group is most powerful. With 36% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, retail investors endured the biggest losses as the stock fell by 7.9%.

Let's take a closer look to see what the different types of shareholders can tell us about Chong Kun Dang Pharmaceutical.

See our latest analysis for Chong Kun Dang Pharmaceutical

What Does The Institutional Ownership Tell Us About Chong Kun Dang Pharmaceutical?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Chong Kun Dang Pharmaceutical already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Chong Kun Dang Pharmaceutical's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Chong Kun Dang Pharmaceutical. Chong Kun Dang Holdings Corp. is currently the company's largest shareholder with 27% of shares outstanding. For context, the second largest shareholder holds about 14% of the shares outstanding, followed by an ownership of 8.1% by the third-largest shareholder.

Our research also brought to light the fact that roughly 54% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Chong Kun Dang Pharmaceutical

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

Our most recent data indicates that insiders own a reasonable proportion of Chong Kun Dang Pharmaceutical Corp.. It has a market capitalization of just ₩1.2t, and insiders have ₩170b worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 36% stake in the company, and hence can't easily be ignored. 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.

Public Company Ownership

Public companies currently own 27% of Chong Kun Dang Pharmaceutical stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Chong Kun Dang Pharmaceutical better, we need to consider many other factors. For instance, we've identified 1 warning sign for Chong Kun Dang Pharmaceutical that you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.