SIMMTECH Co., Ltd.'s (KOSDAQ:222800) market cap surged ₩39b last week, individual investors who have a lot riding on the company were rewarded

Key Insights

• The considerable ownership by individual investors in SIMMTECH indicates that they collectively have a greater say in management and business strategy
• 47% of the business is held by the top 25 shareholders
• Institutional ownership in SIMMTECH is 14%

If you want to know who really controls SIMMTECH Co., Ltd. (KOSDAQ:222800), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 53% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, individual investors were the biggest beneficiaries of last week’s 12% gain.

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

Check out our latest analysis for SIMMTECH

What Does The Institutional Ownership Tell Us About SIMMTECH?

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.

SIMMTECH already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see SIMMTECH's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in SIMMTECH. Simmtech Holdings Co., Ltd. is currently the company's largest shareholder with 33% of shares outstanding. With 4.3% and 2.1% of the shares outstanding respectively, National Pension Service and The Vanguard Group, Inc. are the second and third largest shareholders.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of SIMMTECH

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 data suggests that insiders own under 1% of SIMMTECH Co., Ltd. in their own names. It appears that the board holds about ₩782m worth of stock. This compares to a market capitalization of ₩376b. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 53% of SIMMTECH shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Public Company Ownership

Public companies currently own 33% of SIMMTECH stock. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand SIMMTECH better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with SIMMTECH , and understanding them should be part of your investment process.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.