Could The INNOX Advanced Materials Co.,Ltd. (KOSDAQ:272290) Ownership Structure Tell Us Something Useful?

The big shareholder groups in INNOX Advanced Materials Co.,Ltd. (KOSDAQ:272290) 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 quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.

INNOX Advanced MaterialsLtd is a smaller company with a market capitalization of ₩395b, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutions own shares in the company. Let’s delve deeper into each type of owner, to discover more about INNOX Advanced MaterialsLtd.

Check out our latest analysis for INNOX Advanced MaterialsLtd

KOSDAQ:A272290 Ownership Summary, March 4th 2020
KOSDAQ:A272290 Ownership Summary, March 4th 2020

What Does The Institutional Ownership Tell Us About INNOX Advanced MaterialsLtd?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it’s included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

INNOX Advanced MaterialsLtd already has institutions on the share registry. Indeed, they own 17% of the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 INNOX Advanced MaterialsLtd’s earnings history, below. Of course, the future is what really matters.

KOSDAQ:A272290 Income Statement, March 4th 2020
KOSDAQ:A272290 Income Statement, March 4th 2020

We note that hedge funds don’t have a meaningful investment in INNOX Advanced MaterialsLtd. Innox Corporation is currently the largest shareholder, with 26% of shares outstanding. Next, we have National Pension Service and Kyeong-Ho Chang as the second and third largest shareholders, holding 5.2% and 4.7%, of the shares outstanding, respectively.

Further, we can found that 50% of the ownership is controlled by the top 17 shareholders, meaning that no one shareholder has a majority interest in the ownership.

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

Insider Ownership Of INNOX Advanced MaterialsLtd

The definition of company insiders can be subjective, and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Shareholders would probably be interested to learn that insiders own shares in INNOX Advanced Materials Co.,Ltd.. In their own names, insiders own ₩35b worth of stock in the ₩395b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, with a 49% stake in the company, will not easily be ignored. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

It appears to us that public companies own 26% of A272290. It’s hard to say for sure, but this suggests they have entwined business interests. This might be a strategic stake, so it’s worth watching this space for changes in ownership.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We’ve spotted 3 warning signs for INNOX Advanced MaterialsLtd you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.