TEMC Co., Ltd. (KOSDAQ:425040) insiders, who hold 33% of the firm would be disappointed by the recent pullback

Key Insights

• Insiders appear to have a vested interest in TEMC's growth, as seen by their sizeable ownership
• 56% of the business is held by the top 4 shareholders
• Institutional ownership in TEMC is 16%

A look at the shareholders of TEMC Co., Ltd. (KOSDAQ:425040) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 33% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 13% decline in share price, insiders suffered the most losses.

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

See our latest analysis for TEMC

What Does The Institutional Ownership Tell Us About TEMC?

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.

TEMC already has institutions on the share registry. Indeed, they own a respectable stake in 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. 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 TEMC's historic earnings and revenue below, but keep in mind there's always more to the story.

TEMC is not owned by hedge funds. Our data shows that Wonyang Yu is the largest shareholder with 30% of shares outstanding. POSCO Venture Capital Co., Ltd. is the second largest shareholder owning 9.6% of common stock, and Samsung Venture Investment Corporation holds about 8.4% of the company stock.

Our research also brought to light the fact that roughly 56% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of TEMC

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

It seems insiders own a significant proportion of TEMC Co., Ltd.. It has a market capitalization of just ₩171b, and insiders have ₩56b worth of shares in their own names. 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, who are usually individual investors, hold a 20% stake in TEMC. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With an ownership of 23%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

It seems that Private Companies own 8.4%, of the TEMC stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand TEMC better, we need to consider many other factors. Take risks for example - TEMC has 2 warning signs we think you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.