Haesung Industrial Co., Ltd.'s (KOSDAQ:034810) market cap increased by ₩23b, insiders receive a 59% cut

Key Insights

• Insiders appear to have a vested interest in Haesung Industrial's growth, as seen by their sizeable ownership
• A total of 3 investors have a majority stake in the company with 59% ownership
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

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Every investor in Haesung Industrial Co., Ltd. (KOSDAQ:034810) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 59% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit ₩212b market cap following a 12% gain in the stock.

Let's delve deeper into each type of owner of Haesung Industrial, beginning with the chart below.

See our latest analysis for Haesung Industrial

What Does The Lack Of Institutional Ownership Tell Us About Haesung Industrial?

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. Haesung Industrial's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

We note that hedge funds don't have a meaningful investment in Haesung Industrial. Jae-Wan Dan is currently the company's largest shareholder with 21% of shares outstanding. The second and third largest shareholders are Woo-Young Dan and Woo-Jun Dan, with an equal amount of shares to their name at 19%.

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 59% 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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Haesung Industrial

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.

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 own more than half of Haesung Industrial Co., Ltd.. This gives them effective control of the company. That means they own ₩125b worth of shares in the ₩212b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 40% 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 4 warning signs for Haesung Industrial (3 don't sit too well with us!) 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.