The big shareholder groups in Micro Contact Solution Co., Ltd. (KOSDAQ:098120) have power over the company. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. 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.
With a market capitalization of ₩39b, Micro Contact Solution is a small cap stock, so it might not be well known by many institutional investors. In the chart below, we can see that institutions don't own shares in the company. We can zoom in on the different ownership groups, to learn more about Micro Contact Solution.
What Does The Lack Of Institutional Ownership Tell Us About Micro Contact Solution?
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 fund under management, so the institition 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. Micro Contact Solution'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 Micro Contact Solution. Looking at our data, we can see that the largest shareholder is the CEO Seung-Eun Yang with 18% of shares outstanding. The second largest shareholder with 11%, is KYOUEI CORPORATION, followed by Sung-Yeob Wui, with an ownership of 1.9%. Interestingly, Sung-Yeob Wui is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.
A deeper look at our ownership data shows that the top 6 shareholders collectively hold less than 50% of the register, suggesting a large group of small holders where no one share holder has a majority.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of Micro Contact Solution
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 Micro Contact Solution Co., Ltd.. Insiders have a ₩8.0b stake in this ₩39b business. 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 retail investors -- own 69% of Micro Contact Solution. 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.
Private Company Ownership
It seems that Private Companies own 11%, of the A098120 stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
It's always worth thinking about the different groups who own shares in a company. But to understand Micro Contact Solution better, we need to consider many other factors. Be aware that Micro Contact Solution is showing 3 warning signs in our investment analysis , and 1 of those is concerning...
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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