HLB innoVation Co.,Ltd.'s (KOSDAQ:024850) last week's 13% decline must have disappointed individual investors who have a significant stake

Key Insights

• Significant control over HLB innoVationLtd by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 14 investors have a majority stake in the company with 42% ownership
• Insider ownership in HLB innoVationLtd is 12%

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If you want to know who really controls HLB innoVation Co.,Ltd. (KOSDAQ:024850), then you'll have to look at the makeup of its share registry. We can see that individual investors own the lion's share in the company with 58% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, individual investors endured the biggest losses as the stock fell by 13%.

In the chart below, we zoom in on the different ownership groups of HLB innoVationLtd.

See our latest analysis for HLB innoVationLtd

What Does The Lack Of Institutional Ownership Tell Us About HLB innoVationLtd?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

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. HLB innoVationLtd'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.

Hedge funds don't have many shares in HLB innoVationLtd. Looking at our data, we can see that the largest shareholder is HLB Co., Ltd. with 18% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.1% and 5.6% of the stock.

Our studies suggest that the top 14 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 HLB innoVationLtd

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 most recent data indicates that insiders own a reasonable proportion of HLB innoVation Co.,Ltd.. Insiders own ₩25b worth of shares in the ₩214b 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 58% of HLB innoVationLtd shares. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Public Company Ownership

We can see that public companies hold 30% of the HLB innoVationLtd shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that HLB innoVationLtd is showing 2 warning signs in our investment analysis , you should know about...

Of course this may not be the best stock to buy. So take a peek at this free 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.